Discussion on Real Estate Funds REITs

Jaggudada · Post by **Jaggudada** » Sun Sep 09, 2007 11:24 pm

If you need a real estate exposure per your AAP, what funds, index funds, ETFs would you recommend? There are US real estate funds and then there are international real estate funds. Is international better than the domestic as you will be diversified and invested in more than US. Is this true that REITs have to declare 90% of the cap gain in the year it is accrued?

feeonly · Post by **feeonly** » Mon Sep 10, 2007 8:04 am

In order for a company to qualify as a REIT, it must comply with certain provisions within the Internal Revenue Code. As required by the Tax Code, a REIT must do a number of things including: Pay annually at least 90 percent of its taxable income in the form of shareholder dividends.

While there are 190 traded REIT's safer method would be to invest in a REIT mutual fund or ETF. There are a number of International REIT funds that you could invest in as well.
Some good REIT fund options are:

EGLRX - Alpine International REIT Fund
DFITX - DFA International REIT Fund

RWX - International REIT ETF

TAREX - Third Avenue REIT Fund
CGMRX - CGM REIT Fund
VGSIX - Vanguard REIT Fund
TRREX - T Rowe Price REIT Fund

ICF - Steers and Cohen REIT ETF
VNQ - Vanguard REIT ETF

RRK · Post by **RRK** » Fri Nov 23, 2007 11:10 pm

I own FIREX - Fidelity Intl REIT.

It is close to 52 weeks low ( for that matter all REITs are ).

I am thinking about adding more to Intl REIT ( for balancing). What is the good REIT to go ? I am only looking at International REITs that excludes US REIT companies.

some of the options I see are:

Investors in the U.S. now have a wider variety of funds to choose from to gain exposure to non-U.S. commercial property (real estate). In the beginning, there were actively managed funds from Cohen and Steers [IRFAX] and Fidelity [FIREX]. Then came the first index product, State Street?s SPDR Dow Jones International Real Estate ETF (RWX), which rapidly accumulated over $1 billion in assets. Now there are two more index offerings, one from Barclays Global Investors -- the iShares S&P World ex U.S. Property Fund (WPS), with an expense ratio of 0.48% compared to the SPDR?s 0.60%, -- and the Wisdom Tree International Real Estate Fund (DRW) with an expense ratio of 0.58%. While the State Street and BGI products use market capitalization weighting, the Wisdom Tree fund, in keeping with the firm?s fundamental indexing approach, weights its holdings by their respective dividend yields.

more:
http://www.seekingalpha.com/article/49711-real-estate-etfs-a-quick-overview

Global Real Estate ETFs - Correlation to U.S. Market
on Oct 24, 2007 by The Sun

any recommendations ?

vivmat · Post by **vivmat** » Sat Nov 24, 2007 12:09 am

I think Feeonly has listed some good funds. I am also on the lookout for a RE fund and had done some research last month.

I had shortlisted the following as well
EGLRX, FIREX, TAREX and CGMRX

In the end I picked EGLRX (will buy in after distributions in dec)

I was very tempted to pick CGMRX simply because of Ken Heebner's track record and reputation, but this fund isnt really a true real estate fund. Its a "go anywhere so as to maximize returns" fund. Look at the top holdings - some dont have much to do with RE (but look at the returns!). I was really tempted.

But EGLRX it is for me, come Dec end.

laks0 · Post by **laks0** » Sat Nov 24, 2007 1:48 am

vivmat;59567I think Feeonly has listed some good funds. I am also on the lookout for a RE fund and had done some research last month.

I had shortlisted the following as well
EGLRX, FIREX, TAREX and CGMRX

In the end I picked EGLRX (will buy in after distributions in dec)

I was very tempted to pick CGMRX simply because of Ken Heebner's track record and reputation, but this fund isnt really a true real estate fund. Its a "go anywhere so as to maximize returns" fund. Look at the top holdings - some dont have much to do with RE (but look at the returns!). I was really tempted.

But EGLRX it is for me, come Dec end.[/quote]

Guys,

I think I read it in diehards forum, Foreign REITs may be considered PFIC, so do your DD before investing in taxable accounts. IRAs may be OK though.

GMB · Post by **GMB** » Wed Dec 12, 2007 8:19 pm

Hi There,

I've been thinking of investing in US real estate but cann't justfitying myself owning 2nd home in US and taking headache of rental , maintenance etc.

Do you seniors guys( Desi, BOBUS , RRK....) recommend to buy REIT instead. Right now i don't have any sector fund at all in my AAP and I've been thinking of putting 3-5 % of AAP in REIT.

Do you think it is a good time or wait for some more time. ?

VGSIX :
Current Prices
Price as of 12/11/2007$21.68Change?$1.26?5.49%52-week high 02/07/2007$28.9352-week low 11/26/2007$20.37

RRK · Post by **RRK** » Wed Dec 12, 2007 9:13 pm

If you are asking about timing REIT, it is difficult. The sector has taken a good hit and there may still be some bad news left.

There is not going to be a "good time" to buy. When the prices are high, usually it gives a "good feeling" for the investor to "buy", which is actually wrong time to buy and "right time to sell".

Check if your AAP needs REIT, if yes, then start DCA into the fund slowly.
Divide and invest over a period of min 6 months. 1 year may give you a good feel of riding the volatality.

desihometown · Post by **desihometown** » Wed Dec 12, 2007 11:03 pm

Isnt it better to have REIT in tax deferred account 'coz of the huge
capital gain distributions ?

If u are already in a high tax bracket, it makes sense to have REITs in
tax deferred/401K/IRA/Roth accounts.

KRV · Post by **KRV** » Wed Dec 12, 2007 11:40 pm

Yes, it is preferable to have REITs in tax-sheltered accounts. REITs distribute at least 90% of their income and they are treated as ordinary dividends (not "qualified").

GMB · Post by **GMB** » Thu Dec 13, 2007 1:42 am

Thanks Guys....so let me get this straight : Your advice is to do DCA from some existing Moneymarket fund in Retairment account to this REIT ?