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  • Two Real Estate funds going in two different directions over this past year are BREFX and PETDX . The least volatile I've researched seems to be FRIFX (a favorite of Investor I believe).

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  • edited November 2013
    From Seeking Alpha
    Gundlach: Time to buy interest rate risk
    "People are absolutely freaking out about interest-rate risk," says Jeff Gundlach, sitting down with Robert Shiller to size up the investment landscape. Ever the contrarian, Gundlach suggests last year's 1.4% low in the 10-year Treasury yield could still get taken out. The catalyst? "You never know until after the fact; otherwise, it would be priced in the market. But there is no inflation." To see "freaking out" in a picture, check out the price charts of the mortgage REITs, particularly the two proxies for riding the long end of the curve - Annaly (NLY) and American Capital Agency (AGNC). Gundlach: "You can take advantage of pockets of opportunity in what people don't want ... If you're willing to take the interest-rate [risk], you can get yields of 11% in the agency mortgage market."Constructive on housing (but not homebuilders), Gundlach is also bullish on non-agency mortgage paper, calling it the cheapest sector in fixed income on a risk-adjusted basis. Fans of also beaten-up non-agency mREITs like American Capital Mortgage (MTGE), MFA Financial, Dynex (DX), and Two Harbors (TWO) may want to take notice.Mortgage REIT ETFs: REM, MORT, MORLLong-duration Treasury ETFs: TBT, TLT, TMV, TBF, EDV, TTT, TMF, TLH, ZROZ, SBND, DLBS, VGLT, UBT, TLO, LBND, TENZ, TYBS, DLBL
    Also A Good Read
    Thirdly, monetary policy is being enlisted to try to generate the economic growth that politicians need to meet spending and entitlement pledges made to voters.
    "Long term, it's not so much a financial crisis that we face. It's more a political and social crisis because these promises that we have made for ourselves will be broken," King told the BreakingViews conference.
    Seen in that light, if the West is in the grip of ‘secular stagnation', as Summers suggested, the welfare state will have to shrink or taxes will have to rise to pay for it.
    http://www.reuters.com/article/2013/11/29/us-economy-global-stagnation-insight-idUSBRE9AS03O20131129
  • edited November 2013
    Reply to @bee:

    Hi Bee,

    BREFX has been killing the RE category because it really isn't a dedicated RE fund as detailed here:

    http://www.baronfunds.com/News-Commentary/Library/PDF-Viewer/?pId=13e41844-13f1-4f36-b157-45ba28bf1ef0&docId=retfact

    As shown by the portfolio composition and performance chart, BREFX is essentially a gamish of consumer cyclical (think VCR) and RE as shown HERE. Buyer beware: If an investor wants the long-term diversification benefit of a RE fund, then BREFX will likely not fit the bill.

    Kevin
  • beebee
    edited December 2013
    Reply to @kevindow: Thanks...I also notice a fairly over weighted bet in Healthcare, utilities and Basic Materials. His success seems worthy of how this fund connects the dots from these sectors to RE.

    A good RE fund, in my opinion, should be a flexible collection RE related investments not neccessarily investments that fall only within M* difinition of what RE investments are.

    A value tilted RE manager might see oversold opportunities outside of what M* catagorizes as strictly RE. For example, CSTE, a company that manufactures quatrz countertops, would not be listed within M* RE sector, but rather basic materials. Quatrz or basic material connection to a RE fund is obvious and from my point of view might be a better place to invest shareholder's dollars than say strictly within the M* RE sector. CSTE is up 211% YTD.

    Similarly, Healthcare makes sense to me as well...think Hospitals, Long Term Care Residences, Doctor's offices, etc.

    Driling down into individual position is really important with a fund like this.
    Here's the most recent M* data on the top 25 holdings which makes up 38% of the fund:
    portfolios.morningstar.com/fund/holdings?t=BREFX&region=USA&culture=en-US
    Thanks for finding your links.
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