Why REITs, ETFs Acquire A Good Position

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April 28, 2009 10:18am NYSE:RWR NYSE:VNQ

reitOne sector that could be worth watching is the real estate investment trusts, or REITs, which have gotten strong ratings and risen rapidly; exchange traded funds (ETFs) can give investors well-diversified exposure to these investments.
In general, an investor who seeks a REIT is concerned with tax advantages, and a high yield. Jim Abbot of A Dash of Insight says that the REIT must return 90% of income to unit holders to avoid taxation at the trust level. Furthermore, the REIT provides smaller investors the opportunity to add real estate of various types to their portfolios without directly buying properties.

When the properties held within the trust depreciate substantially is when the biggest risk is incurred. Commercial real estate has taken the biggest hit since the economy has taken a beating. As of right now, the potential acquisitions are the reason REIT ETFs may have potential.

Full Story: http://www.etftrends.com/2009/04/why-reits-etfs-acquire-a-good-position.html



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