Exchange Traded Concepts, LLC, ("ETC") a leader in providing white label Exchange Traded Fund (ETF) solutions, in conjunction with Fundamental Income, today announced that it has launched the NETLease Corporate Real Estate ETF (NYSE ARCA: NETL).
The NETL ETF is uniquely focused solely on Net Lease Real Estate Investment Trusts (REITs), which is one of the fastest growing sectors within the REIT space. This pure-play Net Lease REIT ETF encompasses a variety of REITs that provide sustainable cash flows by leasing their properties through long-term contractual leases on a triple-net lease basis. The leases have terms that are generally 10 years or longer, predetermined rental rate increases, and minimal landlord responsibilities.
Net Lease real estate has long been a misunderstood sector, primarily because Net Lease REITs act more as capital providers to operating businesses and generate their returns from contractual, tenant lease payments, rather than property appreciation. In addition, the management teams of Net Lease REITs, may have strong underwriting and due diligence methodologies that target credit-worthy tenants and properties that are integral to the tenants' businesses. Net Lease tenants are also responsible for property expenses such as taxes and insurance, other operating expenses and most of the capital improvements, which further support reliable cash flows produced by the underlying real estate for the building owner.
This newly created Net Lease ETF is based on the Fundamental Income Net Lease Real Estate Index (NNNLSCTR) which is calculated by Nasdaq and aims to allow investors to benefit from these unique Net Lease REIT fundamentals. The NETLease ETF does not have exposure to multi-tenant malls, traditional multi-tenant office buildings and multifamily owners, all of whom have significant capital expenditures and operating expense obligations.
"We are thrilled to be working with the Fundamental Income team to bring this timely and innovative fund to market," said J. Garrett Stevens, CEO of Exchange Traded Concepts.
"This Fund tracks the Net Lease real estate sector, which exemplifies consistent and predictable cash flows that Net Lease REITs derive from a diverse portfolio of corporate-leased properties."
"Great colleagues and great ideas are the true drivers of ETF success," continued Stevens. "We're very pleased to add Fundamental Income and NETL to our growing list of affiliates and innovative ETF solutions."
Chris Burbach, co-founder and Partner of Fundamental Income stated, "We started Fundamental Income with a simple view that investments with cash flows built upon identifiable underlying fundamentals, that are stable and predictable, should be worth more than those without a clear foundation or less certainty." Mr. Burbach continued, "Net Lease REITs have the potential to provide investment income and capital preservation, in a market searching for both, which is why we are excited to partner with ETC. We believe this ETF offers investors broad exposure to the tangible U.S. economy through the underlying predictable rents of NETL. The time has come for investors to shift their focus from property appearances to results and for Net Lease real estate to stand on its own – we created the Index to do just that."
The NETLease ETF will be available on Friday, March 22, 2019 on the NYSE under the ticker NETL, "The New York Stock Exchange is the home of innovation and has been for more than 226 years. We are delighted to be working with ETC and Fundamental Income in support of its dedicated focus directly on the Net Lease Real Estate sector," said Douglas Yones, NYSE Head of ETFs.
About Fundamental Income
Founded in 2018 and headquartered in Phoenix, Arizona, Fundamental Income was created to identify and create investment strategies rooted in solid, understandable fundamentals that are expected to generate sustainable income with predictable growth. The Fundamental Income Net Lease Real Estate Index (NNNLSCTR), which is calculated by Nasdaq is an inaugural strategy created by Fundamental income to create a more reliable and consistent performance compared to other REIT ETFs.
The firm's principals are proven leaders and innovators within the Net Lease REIT community and have extensive experience in net lease real estate, capital markets and credit opportunities with over $13 billion of transaction experience. Through the Net Lease Index and the NETLease Corporate Real Estate ETF (NYSE ARCA: NETL) www.netleaseetf.com, the team will seek to bring awareness and to convert additional outside capital to an often-misinterpreted net lease industry. Additional information on Fundamental Income can be found on their website at: www.fundamentalincome.com.
Chris Burbach is a co-founder and Partner of Fundamental Income who spent more than a decade as a management team member of two Net Lease REITs. Chris recently left his previous role as Executive Vice President, Underwriting at STORE Capital Corporation, a leading Net Lease REIT, where he led the underwriting of approximately $12 billion of Net Lease investments, including over $7.5 billion in closed transactions.
Alexi Panagiokapoulos is a co-founder and Partner of Fundamental Income. He previously served as the Managing Director, Strategic Initiatives for SMS Financial, a private distressed debt firm and joint venture partner of the FDIC. Alexi was instrumental in the acquisition, recovery and servicing of over $940 million of commercial debt across all product types. Prior to SMS, Alexi specialized in credit and underwriting at STORE Capital Corp, a publicly listed REIT.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the NETLease ETF please call 1-405-778-8377 or visit the website at www.Netleaseetf.com. Read the prospectus or summary prospectus carefully before investing.
Investments involves risk. Principal loss is possible. The fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Index, and consequently the Fund, is expected to concentrate its investments in real estate companies. As a result, the value of the Fund's shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries.
Investments in real estate companies and REITs involve unique risks, including limited financial resources, they may trade less frequently and in limited volume, and they may be more volatile than other securities. In addition, securities in the real estate sector are subject to certain risks associated with direct ownership of real estate and the risk that the value of their underlying real estate may go down. Companies in the Net Lease Real Estate sector may be affected by unique factors related to leasing properties to single tenants including dependence on the financial performance of its' tenants and lease terms related to rent escalations based on economic measurements. The fund may invest in foreign securities which involves political, economic and currency risks, differences in accounting methods and greater volatility. Investments in small and mid-sized companies have historically been subject to greater investment risk than large company stocks.
Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Definitions: A Triple Net lease is a form of real-estate lease agreement where the tenant or lessee is responsible for the ongoing expenses of the property, including real estate taxes, building insurance, and maintenance, in addition to paying the rent and utilities. Cash Flow is the net amount of cash and cash-equivalents being transferred into and out of a business. The Fundamental Income Netlease Real Estate Index is a selection of qualifying equity REITs that own properties leased to single tenants under long-term, net lease agreements which specify that the tenant is responsible for paying rent and most, if not all, property expenses. It is not possible to invest directly in an index.
Exchange Traded Concepts, LLC serves as the investment advisor. The Funds are distributed by Quasar Fund Services, LLC which is not affiliated with Fundamental Income, Exchange Traded Concepts, LLC or any of their affiliates.
Important Disclosures
Exchange Traded Concepts is an SEC Registered Investment Adviser. The Firm's Form ADV is publicly available and can be found here: https://www.adviserinfo.sec.gov/Firm/151197. ETC may be subject to various conflicts of interest in the provision of its services. Potential conflicts of interest shall be identified in the Firm's Form ADV. The Exchange Traded Funds are referred to as "Funds" for purposes of this document. ETC transacts business in the United States and other jurisdictions where it is properly registered or excluded or exempted from registration requirements. This document does not constitute an offer of services in jurisdictions where ETC does not have the necessary licenses.
No representation is made that any Fund's investment process, objectives, goals or risk management techniques will or are likely to be achieved or be successful or that any Fund or any underlying investment will make any profit or will not sustain losses. The risks of investing in a Fund will not be negated by ETC's Fund services, and no assurance is given that a Fund will not be exposed to risks of significant trading losses.
The information provided herein does not constitute tax, legal or accounting advice. ETC does not provide legal, financial, accounting or tax advice. Clients and prospective Clients, as well as investors and prospective investors in a Fund ("Investors") are advised to seek the counsel of their own legal, financial and tax advisors for all matters relating to the services and structures contemplated herein. Each Investor (either alone or with its professional advisors) is solely responsible for its own due diligence, risk assessment and tolerance, investment objectives, any decision to invest in a Fund, and for monitoring its investment for purposes of determining whether it wishes to remain invested in such product and whether such product continues to be appropriate for its circumstances and requirements.
The information provided herein: (a) is provided as of the date indicated, (b) is in summary only and is not complete, and (c) is subject to change at any time without notice. Certain information provided by ETC is based on third-party sources and, although generally believed to be reliable, has not been independently verified. ETC is not responsible for errors or omissions from these sources. No representation is made with respect to the accuracy, completeness, or timeliness of such information, and ETC assumes no obligation to update or otherwise revise such information. In no event will ETC be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with the use of the information contained herein, even if advised of the possibility of such damages. ETC and its respective employees and its affiliates hereby exclude, to the extent permitted by applicable law, all liability in connection with the use of the information herein.
Interests in Funds will not be insured by the FDIC, the SIPC or any other organization, will not be deposits of any bank, and are not guaranteed by any bank.