REITs Offer Attractive Returns

Building and maintaining a long term, good performance portfolio demands diversification and some attention to market conditions. Real Estate is a key asset class that can be misunderstood but plays a part in a diversified portfolio. This article looks at US REITs. Among dividend paying equity ETFs, U.S. REITs (IYR) outperformed all other major asset classes for the week ended 4/20/2011. Strength in U.S. REIT growth has lasted for several months now.

Of the four major ETFs in the category, the Vanguard REIT Index ETF (VNQ) has offered investors the highest yield over the past 3 and 5-year periods and has shown strong growth in the past year. The ETF in the category with the highest level of growth in the past year has been the iShares Cohen & Steers Realty ETF (ICF), producing returns of over 23%. In conclusion, U.S. Equity REITs offer several advantages in building a portfolio. As always, the view should be taken in an overall asset allocation strategy. This is especially true in today's slightly overvalued and overbought markets.

Source: Seeking Alpha

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