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Wednesday, March 9, 2011

Initial public offering of Middlefield Group new REIT INDEXPLUS Income Fund

Despite the TSX small plunge that still persist today, my non registered portfolio is at more than 104k. I am confident I will be able to make a good return out of the HZU. In my previous post about Horizons BetaPro COMEX Silver Bull Plus ETF (HZU), a reader comment to be careful with Horizons BetaPro COMEX Silver Bull Plus ETF (HZU), that the lowest value had reached 8$ in the past 52 weeks. HZU value is now at more than 32$ per unit. While taking a quick look at the performance of HZU, any small investors could think that the 8$ per unit value is a sign of volatility of the title. But it’s truly not the case.

In the past 52 weeks, HZU constantly gains value, just like my favorite Sprott Physical Silver Trust (PHS.U). Which mean here that we are not talking here about a title that goes up-and-down without any reason. What we are seeing here is a fantastic case of steady grows. These days had been great for silver investment. Remember, I had been actively following the PHS.U since November 2010. That doesn’t make a silver specialist BUT, I can attest of what I had been able to achieve with my PHS.U. If it wouldn’t be for the extra-value of the Canadian dollars at this time, I would have been able to continue my success story with PHS.U. I am currently trying to achieve with HZU what I had been able to achieve with PHS.U. Meaning a lot of cash... And I have a feeling it’s going to work out! 

I got through something very interesting today: the initial public offering REIT INDEXPLUS Income Fund. I am going to explain why I will be investing in 100 units of REIT INDEXPLUS Income Fund.

These days, it’s seemed like Rob Carrick is going gaga for my iShares S&P/TSX Capped REIT Index (XRE)! I am saying “my”, because I had been holding iShares S&P/TSX Capped REIT Index (XRE) for a little while now. According to Carrick, it’s better to hold XRE inside an RRSP or TFSA account because the dividend earns through XRE are a mix of a bit everything involve in real estate. In other words, XRE is not very tax efficient. In my case, I decided to hold iShares S&P/TSX Capped REIT Index (XRE) outside a registered account to add something new to my margin. It wasn’t a bad decision to make if you want my point of view, because I didn’t have any interest in REIT before. XRE add a great diversification to my portfolio. I enjoy the monthly dividend.

Ok, but what iShares S&P/TSX Capped REIT Index (XRE) have to do with REIT INDEXPLUS Income Fund? Well, it’s all a matter of experience. And in this case, my personal experience with REIT. Despite international conflicts going on, the economy is doing better; many jobs had been created in the US. The fact that new jobs had been created in the US is one of the most positive and strong argument about the economy. And with Barack Obama, nothing can go wrong. That being said, the economy is getting stronger. On the long run, real estate is a good investment. I am not a house or condo owner, but I am a REIT units holder!

I had a very good experience with XRE. So far, I made a profit of a bit more than 100$ with my investment in iShares S&P/TSX Capped REIT Index (XRE), not to include the dividend earn. Not much, but the title is stable. And this is exactly what I am looking for when I invest: stability and dividend income. And I am getting both of best worlds with XRE.

Now, imagine an investment product that can possibly beat the TSX Capped REIT Index and promised a 6.5% dividend yield (XRE provided a 5.178% dividend yield). Wouldn’t that be great? Well, that’s exactly what REIT INDEXPLUS Income Fund is all about. 

For the initial public offering, REIT INDEXPLUS Income Fund units are only at 12$. The minimum investment required is of 1 200$ (minimum 100 units) only (and no commission fee!). Sound to me like a great investment and worth a try. I would to get a 100 units for my portfolio. REIT INDEXPLUS Income Fund is being offered by Middlefield Group, an Alberta based asset management company.


My Own Advisor said...


Why not own REI.UN, HR.UN outright instead of owning XRE?


Sunny said...

Hi there,

I invest in XRE because its holding many REIT companies inside its own index and I wanted to hold something diversify. Also, the dividend is ok and XRE is a 4 stars MorningStar investment. Quite good!


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