Author Topic: Equinix or CyrusOne REIT?  (Read 563 times)

neonlight

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Equinix or CyrusOne REIT?
« on: February 17, 2019, 05:30:31 AM »
Hi guys, taking the plunge soon into REITS. I like data center REITS as it also rides on the tech wave  - think server racks for big tech firms, AI, big data what not.

I am deliberating between Equinix and CyrusONE, does anyone have any experience with either of them? I want to pick one.

MustacheAndaHalf

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Re: Equinix or CyrusOne REIT?
« Reply #1 on: February 17, 2019, 08:04:57 PM »
The two stock tickers are EQIX (Equinix) and CORE (CyrusONE).
Equinix has a $34 billion market cap (shares x price/share), while CyrusONE is a $6 billion company (by market cap).

I prefer diversifying, so in the past I owned Vanguard REIT (VNQ), which also holds shares of EQIX:
https://etfdb.com/etf/VNQ/#holdings
(EQIX is 3% of that fund, the 5th largest holding.  CONE is down on page 4, with 0.51%)

I also found "Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF" (SRVR) with an 0.60% expense ratio that features EQIX as it's #1 holding (15.6% of the ETF's assets).  But investing in tiny ETFs with only $9 million in assets is a bit annoying, and the expense ratio isn't that good.

One thing worth mentioning: the company profiting the most from data centers is Amazon, with their Amazon Web Services.  They have the biggest business in data centers, but there's no way to buy just the web services business in isolation.

neonlight

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Re: Equinix or CyrusOne REIT?
« Reply #2 on: February 18, 2019, 03:03:02 AM »
Thanks MustacheAndaHalf, I should DMOY, but if given will you still go for VNQ, or would you pick EQIX/CORE directly.

MustacheAndaHalf

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Re: Equinix or CyrusOne REIT?
« Reply #3 on: February 18, 2019, 07:38:28 AM »
I don't know how this purchase fits into your overall investments.

Is this 2-5% of your investments?  In that case, if one company goes bankrupt you have a limited risk of loss.  Sometimes people need to play with a small part of their portfolio.

Or is this about 20% of your investments?  Then you should aim for something like VNQ, which holds ~200 different real estate companies.  If any one of them experiences a problem, it's not that significant to your holdings.  It's diverse within real estate, but lacks any investment in 97% of the U.S. stock market.  (real estate stocks are only ~3% of the U.S. market)

And if you're pondering what to do with 100% of your investments, none of the above are diverse enough.  You'd want to start with a passive total stock market index fund.  I'll use Vanguard again because they have low costs: Vanguard Total Stock Market holds ~3800 stocks in it, and charges 0.04% / year in fees.  If you invest $10,000 they use $4/year to keep it running.  And that fund is passive, so it tends to beat all the active managers (overall they cancel each other out - some do better, some worse - but all of them spend too much money in their efforts).  For example, if you look at SPIVA data, the S&P 500 beats ~80-90% of active funds.

So my advice depends on what percent of your portfolio is involved... if it's 2%, sure you could buy EQIX (the larger REIT)... if it's 20%, I personally don't emphasize real estate, but you could buy VNQ (Vanguard REIT).  And if this is 100% of your investment, buy a total stock market fund like VTI (Vanguard Total Stock Market ETF).

neonlight

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Re: Equinix or CyrusOne REIT?
« Reply #4 on: February 20, 2019, 01:54:40 AM »
Thanks!

I am buying VOO for the passive income, and for REITS I will go to VNQ.

The money I am going into VNQ is just 3-5% of my total portfolio so it's also makes sense to go into CyrusONE but I have a problem which is that I am not an active tracker, I might buy and leave it go for holidays for weeks and not knowing what happened to the stocks, so a passive ETFs is the best options ! :)