Investment Thesis
The NETLease Corporate Real Estate ETF (NETL) offers exposure to 23 real estate investment trusts with properties in various industries that all utilize net leases. These contracts, which typically sport long lease terms, stipulate that the tenant will pay for all or almost all property-level expenses. This makes them similar in some ways to asset-backed corporate bonds, except that they usually have built-in revenue (i.e. rent) escalations that are sometimes tied to inflation.
These long and contractually fixed leases become more valuable as interest rates fall. Since the US is likely