PHOENIX,– Exchange Traded Funds (ETFs) are a popular and growing trend in the stock market and it is rare that one would be created locally by two native Arizona businessmen. The NETLease Corporate Real Estate ETF (NYSE: ARCA: NETL) was launched by New York-based Exchange Traded Concepts in conjunction with Fundamental Income, a Phoenix-based firm.
An Exchange-Traded Fund (ETF) is an investment fund traded on stock exchanges, similar to typical stocks. It is a collection of multiple stocks or bonds in a single fund. NETL is the first ETF 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 net lease basis. The leases have terms that are generally 10 years or longer, predetermined rental rate increases, and minimal landlord responsibilities.
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 focus on multi-tenant malls, traditional multi-tenant office buildings and multi-family properties, all of which have significant capital expenditures and operating expense obligations.
Fundamental Income was co-founded by Chris Burbach and Alexi Panagiotakopoulos. Both businessmen are Arizonanatives and graduates of Brophy College Preparatory. Burbach received his Bachelor’s degree from Santa Clara University whereas Panagiotakopoulos opted to remain in Arizona for college and received his Bachelor’s degree from Arizona State University’s W.P. Carey School of Business.
“Arizona is home to two of the top five largest public Net Lease REITs today and the birthplace of two others dating back to the 1990’s,” Burbach said. “It is fitting that a strategy firm aiming to define and help shine a light on the sector be born here as well. Many people inside and outside of Arizona aren’t familiar with what a Net Lease REIT is or why they are so special. We intend to change that and are proud to do so in our hometown.”
“Phoenix is a special town, close to our hearts, and one that has historically been overlooked by Wall Street and the financial sector as a whole,” Panagiotakopoulos said. “Chris and I were born and raised here, watched our families and friends succeed here, built our careers here and now look to grow our firm here. Phoenix is rapidly expanding on all fronts, attracting talent and business from across the country and we hope to contribute to that development with a very applicable strategy; rooted in real estate, and created to provide repeatable results.”
Founded in 2018 and headquartered in Phoenix, 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 strategy was created by Fundamental Income to seek reliable and consistent performance based on a business model.
Burbach left his previous role as Executive Vice President, Underwriting at STORE Capital Corporation (NYSE: STOR), 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.
Panagiotakopoulos previously served as the Managing Director, Strategic Initiatives for SMS Financial, a private distressed debt firm and joint venture partner of the FDIC. He was instrumental in the acquisition, recovery and servicing of over $940 million of commercial debt across all product types. Prior to SMS, Panagiotakopoulos specialized in credit and underwriting at STORE Capital (NYSE: STOR).
About Fundamental Income
Fundamental Income was founded in 2018 and headquartered in Phoenix, AZ. The company aims to create investment strategies 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 seek reliable and consistent performance based on a consistent business model. Additional information can be found at www.fundamentalincome.com.
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. Fund holdings are subject to change at any time and should not be considered a recommendation to buy or sell any security. As of 3/31/19, NETL held 7.92% in STORE Capital Corporation (NYSE: STOR),
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.