Real estate's lustre has certainly dulled recently. At least that's the case in the US. Regardless, real estate is still an important element of diversified portfolio. While may people own their own homes, I've instead decided that buying a house is not the right choice for me. Instead, I aim to keep a certain percentage of my portfolio invested in real estate investment trusts (REITs).
While domestic REIT ETFs have been available for quite some time, exposure to the international real estate market has been missing. Fortunately, the usual suspects have moved ahead with plans to fill this gap.
First to the table is State Street Global Advisers with the streetTracks Dow Jones Wilshire International Real Estate ETF (RWX). This ETF provides easy access to the otherwise hard to reach real estate market in developed and emerging markets countries. Note that a majority of the ETF focus is on developed countries such as Australia, Germany, Japan, and the UK. Also, the ETF isn't purely real estate or REITs due to regulation differences in some countries. In exchange for an expense ration of 0.6%, State Street will maintain investments in 142 of the 161 stock that make up index.
In second place is Barclays Global Investors which reportedly has five iShares exchange traded funds (ETFs) in registration all tied to indexes from the National Association of Real Estate Investment Trusts. These proposed iShares would join a small number of ETFs that invest in REITs, the latest of which follows an international real estate index. I'm looking forward to this one as I seem to have developed quite a strong (unhealthy?) bias for all things Barclays.
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