“Last week I reported that I used the recent correction to invest in commercial real estate, a sector I had avoided since the collapse of Lehman Brothers and ensuing recession. Recent data suggest that property values are stabilizing. Unlike most hapless subprime borrowers, many big real estate borrowers have the wherewithal to get banks to refinance and avoid outright defaults. I think the worst is likely over,” James B. Stewart Reports From The WSJ.

Stewart goes on to say, “I put equal amounts into two REIT ETFs: The Vanguard REIT Index ETF (NYSE:VNQ) for U.S. real estate and the SPDR Dow Jones International Real Estate ETF (NYSE:RWX). There are many other options, but the Vanguard ETF is large, actively traded, very liquid, and boasts a low expense ratio—just 0.13%, compared to the 0.52% real estate ETF average. It seeks to replicate the MSCI US REIT Index. I examined the holdings in several of these broad-based real estate ETFs, and they all own essentially the same REITs, with broad exposure to office buildings, shopping malls, apartment complexes, storage facilities and hotels. The Vanguard ETF’s largest holding is large mall operator Simon Property Group, considered one of the best-run REITs.”

“The SPDR Dow Jones ETF, run by State Street Global Advisors, is also large, liquid and actively traded. Expenses, at 0.59%, are slightly higher than average. The fund tracks the performance of the Dow Jones Global ex-U.S. Select Real Estate Securities Index, which is heavily weighted toward developed Asia and Europe, with little exposure to China and other emerging markets. (I couldn’t find an ETF that focuses exclusively on emerging markets real estate, though there is one for China real estate.) The ETF’s largest holding is Australia-based Westfield Group, one of the world’s largest mall operators. But strictly speaking, it isn’t a pure play on foreign real estate, since Westfield is a major owner and operator of U.S. properties,” Stewart Reports.

See more to the story: HERE

Here are some more details we put together on the two REIT ETFs below:

Vanguard REIT Index ETF (NYSE:VNQ)

Invests in stocks issued by real estate investment trusts (REITs), companies that purchase office buildings, hotels, and other real property. Goal is to closely track the return of the MSCI® US REIT Index, a gauge of real estate stocks. Offers high potential for investment income and some growth; share value rises and falls more sharply than that of funds holding bonds. Appropriate for helping diversify the risks of stocks and bonds in a portfolio.onth-end ten largest holdings.

(43.0% of total net assets) as of 04/30/2010 

1		Simon Property Group Inc.
2		Vornado Realty Trust
3		Equity Residential
4		Public Storage
5		Boston Properties Inc.
6		Host Hotels & Resorts Inc.
7		HCP Inc.
8		AvalonBay Communities Inc.
9		Ventas Inc.
10		Kimco Realty Corp.

SPDR Dow Jones Intl Real Estate (NYSE:RWX)

The investment seeks to replicate the price and yield performance of Dow Jones Global ex-US Select Real Estate Securities index. The index is a float adjusted market capitalization index designed to measure the performance of publicly traded real estate securities in countries excluding the U.S. It is nondiversified.

TOP 10 HOLDINGS ( 46.96% OF TOTAL ASSETS)

Company Symbol % Assets Western Digital Corporation Com (WDC) 10.28 Unilever PLC Common Stock (UL) 6.79   (8801) 6.43 Brookfield Asset Management Inc (BAM) 5.12 Brookfield Asset Management Inc (BAM) 4.96 LAND SECURITIES GROUP PLC (LAND) 3.03   (C31) 2.69   (101) 2.64   (H78) 2.57 BRITISH LAND CO PLC (BLND) 2.45

 

Related posts:

1. Real Estate Investment Trusts: Are U.S. REIT ETFs A Buy In 2012? (VNQ, ICF, ROOF, FNIO, PSR, IYR)
2. ETF Investing: 1000 Best and Worst ETFs Of 2011 (IWM, SPY, DIA, QQQ, VTI)
3. Van Eck To Begin Trading The Market Vectors Mortgage REIT Income ETF (MORT) Wednesday, August 17th
4. Van Eck Introduces Market Vectors Mortgage REIT Income ETF (MORT)
5. The Five (5) Worst Performing Commodity ETPs Of 2011 (UNG, NIB, JJM, BAL, GRU)

ETF BASIC NEWS, RWX, VNQ