Investing Updates : Is the NikkoAM-StraitsTrading Asia ex Japan REIT ETF Dividend Sustainable?

Source : 

https://growbeansprout.com/nikkoam-straitstrading-reit-etf-dividend-sustainable

Apple Intelligence : 

The NikkoAM-StraitsTrading Asia ex Japan REIT ETF (SGX: CFA) recently distributed a dividend, with about one-third classified as a return of capital. This raises concerns about dividend sustainability, as returns of capital reduce the fund’s net asset value and future income potential. While the ETF’s long-term data shows a majority of distributions coming from income and gains, the recent return of capital component warrants further investigation for long-term investors.

The NikkoAM-StraitsTrading Asia ex Japan REIT ETF’s distributions are largely supported by underlying REIT performance, with around 90% of payouts backed by earnings and profits. While the ETF’s distribution yield is currently around 5.9%, the weighted average dividend yield of its top 10 holdings is approximately 6.06%. However, potential risks include rising interest rates, sector-specific challenges, and foreign exchange movements, which could impact future payouts.

The NikkoAM-StraitsTrading Asia ex Japan REIT ETF remains a viable option for investors seeking broad-based exposure to the REITs sector.