The spotlight has been on foreign investments and the industry has offered some new exchange traded funds (ETFs) that focus on real estate abroad. Although foreign real estate trusts don’t carry high yields, like those in the U.S., some countries are starting to implement similar payouts. Some are giving 90% of earnings to shareholders.
Roger Nusbaum for TheStreet.com deciphers the new foreign real estate ETFs:
WisdomTree International Real Estate (DRW): For the dividend minded, this ETF is based on one of WisdomTree’s own indexes, created to weight the components by their respective dividends. Expected yield is 2.5%, but no dividends have been paid out yet. Australia is the largest country represented at 34%, followed by Hong Kong, Japan and U.K. This ETF began trading this month.
SPDR Dow Jones Wilshire International Real Estate (RWX): This is a market cap weighted fund; also heavily weighted in Australia at 20%, but Japan’s representation is larger at 20.11%, both followed by the U.K. at 16%. The yield is likely to be 2.1%. RWX is up 6.3% year-to-date.
The main concern about these funds is the question of whether the largest-weighted countries are within their own bubbles ie. U.K., Hong Kong and Australia.
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