AXS Launches mREIT Tracker ETF, Partners With Gapstow

Michael Madden, Contributing Editor & Research Analyst, Wealth Solutions Report

Alts Manager Adds Real Estate Debt ETF Tracking Gapstow Real Estate Income Index

Alternative investment asset manager AXS Investments added the AXS Real Estate Income ETF (RINC), designed to provide a differentiated investment for higher yields with exposure to liquid real estate. AXS commenced a partnership with index developer Gapstow Capital Partners to create the proprietary Gapstow Real Estate Income Index (GREI), which RINC will track.

GREI is designed to track publicly traded mortgage REITs (mREITs) that own or originate real estate debt. RINC is equally weighted by sector, with 25% in agency residential real estate debt, 25% in non-agency residential real estate debt and 50% in commercial real estate lending, and mREITs within each sector are also equally weighted. According to AXS, this equal weighting makes RINC unique among ETFs providing mREIT exposure.

“We’re very excited to bring RINC to market as a unique offering within our range of alternative income-focused solutions,” said AXS CEO Greg Bassuk. “As investors seek higher yields, many have become overly reliant on corporate junk bonds, which can bring risks with regard to their quality, duration and ties to the corporate credit cycle.”

Greg Bassuk, CEO, AXS Investments

Bassuk added, “With RINC, investors and advisors now have the ability to diversify the high-yield sleeve of their portfolios and complement a broader real estate or alternatives portfolio with unique exposure to the credit side of real estate and an alternative to high yield corporates.”

Chris Acito, CEO of Gapstow, said, “mREITs in general are currently trading at compelling valuations and wide spreads by historical standards as the category has had to digest a rapid rise in interest rates, high office vacancies and a short flurry of banking crises, all in short order.”

Chris Acito, CEO, Gapstow Capital Partners

Acito continued, “But rates eventually normalize, demand for residential housing remains high, and a clear retrenchment of banks from real estate lending should provide significant opportunity to a range of mREITs to both take on and originate compelling new debt investments. An equal-weighted, well-diversified approach to accessing the space will be key as the category enters its next phase, and the GREI index we created to underpin RINC is one we expect to effectively capture these changing market dynamics.”

Gapstow advises hedge funds and oversees more than 30 alternative credit indices. Aside from RINC, AXS offers products with exposure to collateralized loan obligations, tactical income solutions and sustainable income, with a goal of providing broader access to investment opportunities that were previously available only to institutional and high net worth investors.

Michael Madden, Contributing Editor and Research Analyst at Wealth Solutions Report, can be reached at mmadden@wealthsolutionsreport.com.

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