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Thoughts on REM iShares Mortgage Real Estate Capped - Others to consider
Good for momentum trades only, not for core holding. Significant risk of capital.
If you are not sure what mortgage REITs are, you may find this article useful (search for REM on Yahoo finance and click through the M* link there if you have problems with the direct link below)
Not to be confused with regular REIT funds like VNQ, RWR, etc., which don't concentrate in mREITs.
All Real Estate funds should be looked at for total return than just yield because they tend to be volatile with potential loss of capital like equities. They can provide diversification benefits in small amounts to an equity portfolio with low correlations to equities but shouldn't be considered as a fixed income asset because of the yield.
@Dex: Rather the buy REM, I suggest you buy it's biggest holding Annaly Mortgage common with a 10.70% yield and the preferred NLY-PC selling slightly below par, with a 7.625% yield. I hold large positions in both. Regards, Ted
Comments
If you are not sure what mortgage REITs are, you may find this article useful (search for REM on Yahoo finance and click through the M* link there if you have problems with the direct link below)
Capital Destruction, Inc.
Not to be confused with regular REIT funds like VNQ, RWR, etc., which don't concentrate in mREITs.
All Real Estate funds should be looked at for total return than just yield because they tend to be volatile with potential loss of capital like equities. They can provide diversification benefits in small amounts to an equity portfolio with low correlations to equities but shouldn't be considered as a fixed income asset because of the yield.
Regards,
Ted