Internationals
Alternatively, advisors seeking more international exposure could take a look at international REIT ETFs.
The SPDR Dow Jones International Real Estate ETF (RWX), with $3.2 billion in assets, is the largest ETF offering access to foreign REITs outside the U.S. Its top country allocations include Australia (10.1%), Japan (17.7%) and the U.K. (12.8%). The fund comes with a 0.59% expense ratio and a 3.77% yield.
If you would rather have a one-stop shop, the SPDR Dow Jones Global Real Estate ETF (RWO) offers global REIT exposure. But the underlying index is based on market capitalization, and the U.S. makes up 55.2%, since most of the largest REITs are here. That allocation is followed by Australia's 8.0% and Japan's 7.8%. The fund has a 0.50% expense ratio and a 2.84% yield.
The Federal Reserve's efforts to help the U.S. economy chug along have dragged down yields on Treasurys, which have essentially dried up yields in the market. However, advisors who are still seeking income-generating options should consider real estate investment trust ETFs as an excellent addition to a well-rounded investment portfolio.
Tom Lydon is editor and publisher of ETF Trends, a Web site with daily news and commentary about the fast-changing trends in the exchange-traded fund (ETF) industry. Lydon is also president of Global Trends Investments, an investment advisory firm specializing in the creation of customized portfolios for high-net-worth individuals. Read the disclaimer: Tom Lydon is a board member of Rydex|SGI.