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Any ideas on a fund which could benefit from an uptick in real estate values, just in case we are near the bottom of the real estate bust? I think in general that REITS are fairly or even overvalued because of the stampede for yield, so I am looking for something different.
With real estate, I just continue to like the highest quality, which is hard to do with a fund. KIFAX is popular and is a mix of REITs and REIT preferreds, although I have to imagine with the race for yield, prfd's are not exactly a bargain. That fund offers a high income in the meantime while you wait. Still, again, as you note, much of the fund is most likely to some degree overbought.
Personally, in terms of specific companies, I really like Brookfield Asset Management (BAM) for their varied asset base (infrastructure, renewable energy and a wide variety of RE holdings and alternative asset management division) and giant, global scope. I own Brookfield and spin-off Brookfield Infrastructure - I do think the parent is undervalued. Infrastructure and the parent company are long-term holdings, but Infrastructure is - I think - overbought. As for the parent company, from the most recent quarterly report: "Intrinsic Value of Common Equity The intrinsic value of Brookfield’s common equity was $40.99 per share at December 31, 2011. This includes net tangible asset value of $34.52 per share and $6.47 per share related to the company’s asset management franchise." http://brookfield.com/_Global/1/documents/relatedlinks/4530.pdf Shares are currently just under $32 and it would appear that the company is going to do another spin-off later this year. Do your own research.
In terms of a non-REIT way to play an uptick in housing, you could look at the homebuilders, although I think that's a looooooong wait.
This is not exactly an endorsement, just a thought. Consider Baron Real Estate (BREFX) which invests in "real estate-related" companies, including such Baron staples as casinos and hotels (both of which have substantial real estate holdings). Their fact sheet is at http://www.baronfunds.com/mutual-funds/baron-real-estate-fund/brefx/. It doesn't have a Morningstar rating yet.
In case you want to look at R/E ETFs, either as a direct investment or to compare against a fund you think you are interested in, below are links to about 2 dozen R/E ETFs, with scads of data and info.
Comments
Personally, in terms of specific companies, I really like Brookfield Asset Management (BAM) for their varied asset base (infrastructure, renewable energy and a wide variety of RE holdings and alternative asset management division) and giant, global scope. I own Brookfield and spin-off Brookfield Infrastructure - I do think the parent is undervalued. Infrastructure and the parent company are long-term holdings, but Infrastructure is - I think - overbought. As for the parent company, from the most recent quarterly report:
"Intrinsic Value of Common Equity
The intrinsic value of Brookfield’s common equity was $40.99 per share at December 31, 2011. This
includes net tangible asset value of $34.52 per share and $6.47 per share related to the company’s asset
management franchise."
http://brookfield.com/_Global/1/documents/relatedlinks/4530.pdf
Shares are currently just under $32 and it would appear that the company is going to do another spin-off later this year. Do your own research.
In terms of a non-REIT way to play an uptick in housing, you could look at the homebuilders, although I think that's a looooooong wait.
Third Avenue Real Estate Value fund (TVRVX) also avoids REITs, but focuses mostly on real estate operating companies (REOCs). Their factsheet is http://www.thirdavenuefunds.com/ta/documents/MonthlyFactsheets/TAREX December 2011.pdf . 60% of the portfolio is non-US. Morningstar has it as a three-star / Gold fund.
For what it's worth,
David
All R/E ETFs
http://etfdb.com/type/real-estate/all/
North American R/E ETFs
http://etfdb.com/type/real-estate/north-america/