Most of the financial sector, which includes real estate investment trusts (REITs), has seen a nice uptrend over the past few months, but with the vast array of choices out there, you can’t help but wonder whether: are all of them created equal?
Gary Gordon of ETF Expert analyzes REITs and concludes that global REITs are the way to go. He states that of the well-established U.S. REITs, most have huge amounts of debt coming due and if the credit markets tighten up, this could potentially be a problem. Some analysts do feel, however, that if REITs can roll this debt over, then shares shouldn’t suffer.
Gordon likes foreign REITs for the following reasons:
- They earn profits in foreign currencies, so are getting a hedge against a weakening dollar
- They may not have to minimize existing shareholders by issuing more stocks to pay off ongoing debts
When investing in these equities, remember to watch the trendlines and do your homework. Here are a few ways to grab exposure to foreign REITs:
- iShares FTSE/NAREIT Global ex-U.S. (NASDAQ: IFGL): up 44.1% year to date
- iShares FTSE/NAREIT Asia (IFAS): up 42.5% year-to-date
For more stories on REITs, visit our REIT category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.