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Smart Beta REIT ETF: The New S&P Equal-Weight Real Estate Index

Benzinga.com
0 Comments| June 24, 2015

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It's no secret that accredited investors, pension funds and sovereign wealth funds have more access to commercial real estate investments than the average investor.

Investor interest in this asset class has grown to the point that equity REITs and select real estate companies have essentially "outgrown" the Financials sector, which is where they currently reside.

That is why when investors wake up on September 1, 2016 they will find that these REITs along with other significant real estate companies will become part of the new GICS Real Estate Sector.

Real estate investment trusts will have been elevated to the "big leagues" where they are likely to attract more institutional investors, funds and ETFs.

Why Invest In REITs

According to NAREIT's reit.com website:

"REITs are total return investments. They typically provide high dividends plus the potential for moderate, long-term capital appreciation. Long-term total returns of REIT stocks are likely to be somewhat less than the returns of higher risk, high-growth stocks and somewhat more than the returns of lower risk bonds."

Since REITs are obligated to pay out at least 90 percent of taxable income as dividends, they are often favored by investors looking for income. REITs can also serve as a hedge against inflation due to rising rents; a feature that is not found in the vast majority of bonds.

However, the challenge for most investors remains how to gain ...

/www.benzinga.com/general/education/15/06/5619347/smart-beta-reit-etf-the-new-s-p-equal-weight-real-estate-index alt=Smart Beta REIT ETF: The New S&P Equal-Weight Real Estate Index>Full story available on Benzinga.com

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