As I noted in an earlier post (See Asset Class Returns for 2009), Canadian REITs were red-hot last year, posting a total return of 55.3%. While REITs are still roughly 25% off their all-time highs, several valuation metrics suggest that they may not be big bargains any more. Take the distribution yield, for instance. The [...]
Claymore Canada has introduced a couple of ETFs that track interesting asset classes: Claymore Global Real Estate ETF (CGR) and Claymore Global Infrastructure ETF (CIF). CGR tracks the Cohen & Steers Global Realty Majors index, which is composed of 75 securities representing the US (40%), UK (10%), Japan (13%), Hong Kong (10.5%), Australia (11%) and [...]
Real Estate Investment Trusts (REITs, pronounced “reets”), which invest in and manage commercial real estate such as office buildings, shopping malls and apartment buildings and distribute most of their income to shareholders, have risk-return characteristics different than those of stocks and bonds and thus provide valuable diversification benefits in a portfolio. But, there is a [...]
Norm Rothery (also featured in this video interview with Jon Chevreau) recently wrote that the ultra-low commissions offered by the discount brokers allow investors with large portfolios to buy the stocks that comprise an index directly and avoid the fees involved in holding ETFs. The concept is interesting but small investors who want to faithfully [...]
Not too long ago, investors couldn’t get enough of Real Estate Investment Trusts (REITs) bidding up the asset class so much that the asset class didn’t yield much of a premium over 10-year Canada bonds. How things have changed! Today, XRE (iShares CDN REIT Sector Index Fund) yields 6.8% compared to 3.85% for the 10-year [...]
In an earlier post on REITs, I quoted from David Swenson’s book that the price of publicly traded REITs fluctuates between a premium to a discount to fair value. Obviously, investors would like to invest in or add to their positions in REITs when they trade at a discount to fair value. To compute the [...]
In response to an earlier post on iShares CDN REIT Sector Index Fund (XRE), some readers were interested in the historical risk and return characteristics of REITs. David Swensen writes in Unconventional Success that real estate is riskier and more rewarding than bonds and has less risk and lower returns than equities: Shorter-term data on [...]
A Real Estate Investment Trust or REIT is an asset class that allows you to get exposure to real estate in your portfolio. Real estate is an interesting asset class because historically it has offered a higher return than bonds (but less than equities) albeit at a higher risk (again less risk than equities). Also, [...]
I received the following query by email and I thought I would expand my reply into a post: Quick question on your asset allocation. Most of it makes sense – Bonds, US/Canadian/International Equities. But why the REIT as a major asset class? Real estate tends to have a low correlation with other asset classes, so [...]
