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At the present time the only real estate fund I have is FRESX. I would like to further invest in real estate with REITS and other real estate income related funds. So far I have come across FRIFX and PETDX .What are some of the others and do any specialize in Health Care? prinx
PETDX is one of my larger holdings with at over 10% of my portfolio. I started buying it two years ago and it has performed very well. It is a difficult fund for many to understand since its list of holdings is usually all Treasuries. But is uses its cash to buy Treasuries or other fixed income assets and then that, in turn, is used as collateral to buy derivatives that track the Dow Jones US Select REIT index. That index is composed of equity REITS with a lot of commercial REITS, but with very little agency backed mortgage REIT exposure. I follow that index then to monitor PETDX. Like a lot of PIMCO mutual funds it usually pays out high dividends and capital gains and is best placed in a Roth, if possible. I have mine in both a Roth and a regular IRA.
I also own REIT stocks with RSO and NCT. RSO has a higher yield than NCT but NCT has outperformed with appreciation and its total return is higher. Neither is invested significantly in residential mortgage backed securities. RSO gets a bad rap, but it has paid a "meaningful" dividend quarterly all through the worst of the recession. It has a reduced dividend from 2008, but it still yields +14%. I have a lot of confidence in management and in their model. Same for NCT.
If you're interested in healthcare you might look at Schwab's own Healthcare Fund - SWHFX. It had a nice end of the year cap gain. It has performed well and has very low expenses.
Thanks Fredk for some very good info and tips. I now have a better understanding about PETDX. For me, some of Pimco funds require more time and effort to understand the basics of their operations.
I have a sizable amount of PRHSX T. Rowe Price Health Science in my rollover IRA and have had a very nice return over a period of several years. Please do a comparison between SWHSX and PRHSX and you will be surprised with the significant difference in results. prinx
Thanks for the tip on PRHSX. I was aware of it, but when I had tried to purchase it through Schwab it was closed to new investors. Checked again now it and it is still closed to new investors there, but discovered that it is open through my Wells Fargo account!
Reply to @scott: Hey Scott, Have you compare RREIX to its value opportunity brethren managed by the same manager HLRRX? Looks like it has the ability to leverage and short and seems to be doing this successfully so far compared to RREIX.
Reply to @bee: Haven't done much research into either, yet, although at first glance I did find the idea of somewhat alternative takes on REIT funds interesting. I'm kinda waiting for REITs to come in a bit to add anything more RE-related.
As I've noted before, I also do like the Asian conglomerates that do have some exposure to real estate, such as Jardine Matheson (JMHLY) and Hutchison Whampoa (HUWHY), although moreso Jardine. I like globally diverse RE plays, but there aren't too many. Brookfield Asset Management (BAM), while not all RE, is an example.
A REIT that I think would be a good fit for older/conservative investors is Retail Opportunity (ROIC), a US REIT that focuses on malls with "need-based" (grocery, drug store, etc) anchors. I haven't found a place for it yet, but I think it's a compelling option for those seeking a more low-key, conservative (in comparison to the rest of the category) REIT, due to the "need-based" focus. People have to do their own research and it certainly isn't without risk, but ROIC would - as far as I've researched - be one to consider if a retired person was looking for an individual REIT.
Lastly, I do not like hotel REITs due to how sensitive they are (I believe they were the worst performing REIT sector in 2008), but Pebblebrook Hotel Trust (PEB) is interesting and unique due to the high quality nature of the hotels and their focus of buying at a discount to replacement cost.
Comments
I also own REIT stocks with RSO and NCT. RSO has a higher yield than NCT but NCT has outperformed with appreciation and its total return is higher. Neither is invested significantly in residential mortgage backed securities. RSO gets a bad rap, but it has paid a "meaningful" dividend quarterly all through the worst of the recession. It has a reduced dividend from 2008, but it still yields +14%. I have a lot of confidence in management and in their model. Same for NCT.
If you're interested in healthcare you might look at Schwab's own Healthcare Fund - SWHFX. It had a nice end of the year cap gain. It has performed well and has very low expenses.
For healthcare REITS you might check: http://www.wikinvest.com/industry/Healthcare_REITs
I watch HCP and MPW.
I have a sizable amount of PRHSX T. Rowe Price Health Science in my rollover IRA and have had a very nice return over a period of several years. Please do a comparison between SWHSX and PRHSX and you will be surprised with the significant difference in results.
prinx
Hey Scott,
Have you compare RREIX to its value opportunity brethren managed by the same manager HLRRX? Looks like it has the ability to leverage and short and seems to be doing this successfully so far compared to RREIX.
As I've noted before, I also do like the Asian conglomerates that do have some exposure to real estate, such as Jardine Matheson (JMHLY) and Hutchison Whampoa (HUWHY), although moreso Jardine. I like globally diverse RE plays, but there aren't too many. Brookfield Asset Management (BAM), while not all RE, is an example.
A REIT that I think would be a good fit for older/conservative investors is Retail Opportunity (ROIC), a US REIT that focuses on malls with "need-based" (grocery, drug store, etc) anchors. I haven't found a place for it yet, but I think it's a compelling option for those seeking a more low-key, conservative (in comparison to the rest of the category) REIT, due to the "need-based" focus. People have to do their own research and it certainly isn't without risk, but ROIC would - as far as I've researched - be one to consider if a retired person was looking for an individual REIT.
Lastly, I do not like hotel REITs due to how sensitive they are (I believe they were the worst performing REIT sector in 2008), but Pebblebrook Hotel Trust (PEB) is interesting and unique due to the high quality nature of the hotels and their focus of buying at a discount to replacement cost.