These 2 Leveraged ETFs Let You Bet on REITs

Horizons has a couple of new exchange-traded funds (ETFs) for investors. If you're bullish on real estate investment trust (REITs), then the BetaPro Equal Weight Canadian REIT 2x Daily Bull ETF (TSX:HREU) has you covered. Meanwhile, for the bears, there's the BetaPro Equal Weight Canadian REIT -2x Daily Bear ETF (TSX:HRED). Both of these funds have management fees of 1.15%.

The stocks that are in these funds are names that REIT investors will be familiar with – including SmartCentres Real Estate Investment Trust (TSX:SRU.UN) and Riocan Real Estate Investment Trust (TSX:REI.UN). Obviously, depending on which fund you invest in you can be short or long in those REITs.

Since these are leveraged ETFs, they can amplify your overall returns – but they also can lead to more significant losses. Which position you decide to take will undoubtedly depend on both your outlook for real estate and the strength of the economy. For REITs, consistent rent collection is crucial and while the economy looks to be in better shape now than during the early stages of the coronavirus pandemic, the delta variant adds some uncertainty into the mix.

The advantage of a leveraged ETF is rather than borrowing on margin, your risk here is limited to what you invest yourself.

Generally, real estate has been a safe place to invest in Canada for over the years with many people cashing out and making some great profits during the pandemic. But now, some investors are worried that valuations may be at their peaks and a crash is overdue. If you fall into that camp, then the bearish ETF might be the more suitable option for you. Otherwise, the Daily Bull ETF is your bet if you believe that both the economy and the real estate market will continue to do well for the foreseeable future.