Net Lease
ETF & Index

We created the Net Lease ETF & Index to define and track the performance of the rapidly expanding public net lease real estate sector. Investors now have the opportunity to own the public net lease sector in a diversified, tradeable and transparent manner.

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Not All Real Estate Is Created Equal

Many investors allocate capital to public REITs as if it is a single asset class, or solely based on a property type, such as office, industrial or retail. We believe both approaches fall short. We focus instead on how these companies generate cash flow, rather than on behavioral biases that have little to do with investment results.

Publicly traded net lease REITs share a common business model, which is centered around a specific lease type, not just a property type. This business model creates four layers of diversification: (1) property type; (2) tenant; (3) industry; and (4) geography.

Net lease REITs use this business model to generate predictable cash flow derived from long-term lease contracts with built-in rent increases and minimal to no landlord responsibilities. As a result, net lease REITs have the highest gross profit margins (approximately 90%) and highest EBITDA margins (approximately 79%), relative to any other public REIT sector.

Net Lease Index
Symbol	NETLXT
Calculator	NASDAQ
Number of Holdings	22
Reconstitution	Annual
Rebalance	Quarterly
Weighing	Modified Market Cap
Methodology	Guide

Methodology

Fundamental Income, through its proprietary public index, the Fundamental Income Net Lease Real Estate Index (NETLXT), calculated by NASDAQ, serves as the index provider to the NETLease Corporate Real Estate ETF (NYSE Arca: NETL). We partner with best-in-class firms to democratize the public net lease sector in a diversified, transparent, and tradable manner.

Broad Based Exposure to the US Economy

Net lease REITs own single-tenant, free-standing commercial properties that serve as the backbone of American business. Including many household names, tenants of publicly traded net lease REITs benefit from the everyday activities of US consumers. Across nearly every sector, industry, and geography, this broad mix of tenants offers investors highly diversified exposure to US corporate real estate and the economy as a whole.

Net Lease Sector Index Highlights

As of June 30, 2023

									22
									Companies
								
										$218B
										Enterprise Value

									$134B
									Market Capitalization
								

									$15.4B
									Annualized Revenue
								

									38.4%
									Debt/Enterprise Value
								

									30,932
									Properties
								
										99.1%
										Occupancy

									15.0yrs
									WTD. AVG. REMAINING LEASE TERM
								

									50
									States
								

									3.7%
									LARGEST WEIGHTED TENANT CONCENTRATION
								

									7.2%
									DIVIDEND YIELD
								

									12.8x
									EQUITY CASH FLOW MULTIPLE
								

									6.3yrs
									WTD. AVG. DEBT / DEBT TERM REMAINING
								
										4.0%
										AVG. BORROWING RATE

									9.9%
									AVG. ANNUAL RETURN 2008-2023
								

Year	Public Net Lease REITs	Gross Assets (billions)
December 2008	11	$19B
June 2023	22	$217B

Growth Statistics
CAGR (Growth Assets)	18.3%
LTM Jun 23 Asset Growth	$8.3B

Sector Gross Assets

Historical Back Tested Performance

	Ticker	Index Name
	NETLX	Fundamental Income Net Lease Real Estate Index
	RMZ	MSCI US REIT Index
	IBOXHY	IBOX USD Liquiid High Yield Index
	SPBDLL	S&P/LSTA U.S. Leveraged Loan 100
	AMZDX	Alerian MLP Infrastructure Index

DISCLAIMER: Back-tested performance is not actual performance, but hypethetical. The back-test calculations are based on the index's current constituents. Prior to 2017 the back-test used an equal weighted methodology. The index inception date was 12/21/2018. All data prior to the inception date is back-tested. Index returns are quoted before fees and expenses.

Net LeaseETF & Index