February 03, 2008 at 1:00 pm by Tom Lydon
The subprime mess is in full meltdown mode, so is it time to consider exchange traded funds (ETFs) in the real estate realm? In reality, real estate has been the best-performing category in open-ended mutual funds.
Murray Coleman for IndexUniverse reports that funds investing in real estate, such as real estate investment trusts (REITs), are considered value-type stocks and are on the small-cap spectrum.
Last week, iShares Dow Jones US Real Estate (IYR) and iShares Cohen & Steers Realty Majors (ICF) were at a point in terms of valuations that could be considered attractive investments. They’re not at the lowest point, but they are showing potential. Asset managers like REITs because they are good diversifiers for a portfolio.
Also, the Federal Reserve’s rate cut is proving to be a good support for REITs. U.S. real estate benchmarks soared after the Jan. 22 three-quarter point rate cut, and the Dow Jones U.S. Real Estate Index soared to double digits.
Tags | Federal Reserve, Financial, Real Estate, Small-Caps
