Mortgage REITs that give a high yield have performed well in 2012. The exchange traded fund Vanguard REIT ETF (NYSEArca: VNQ) has gained about 12% year-to-date. The low interest rate climate has helped REITs bolster earnings and raise dividends to appeal to investors.

“Continuously low interest rates are boosting earnings throughout the sector. Dividend returns for Mortgage REITs are partially dependent on interest rate spreads. Higher interest rates make borrowing less profitable for REITs. Federal Reserve Chairman Ben Bernanke last month said that the central bank ‘would not hesitate’ to purchase more bonds to drive borrowing costs lower if the economy needed it,” Marketwire reported. [Record Low Interest Rates Could Support REIT ETFs]

REITs trade like stocks, but by law, they must pay out 90 % of their taxable income to shareholders as dividends.

Year-to-date, VNQ is up 7.78% compared to a 4.73% gain for the SPDR S&P 500 ETF (NYSEArca: SPY). VNQ is the largest REIT ETF available and gives investors easy access to the biggestcompanies. [Comparing Dividend Yields in REIT ETFs]

VNQ has a total asset base of $24.4 billion, is invested in 113 stocks in total and charges a premium of just 12 basis points to investors. According to Zacks Investment Research, the fund also offers a decent diversification benefit as 45.8% of its asset base is invested in the top 10 holdings. [ETF Spotlight: REITs]

Investors find that REIT stocks and ETFs provide stability and income to offset the doldrums of low interest rates. Furthermore, some companies are seeing opportunity in the demand for income-oriented investments and are trying to go through the process to qualify as REIT status. Their tax-efficient corporate structure allows them to reap some big benefits over regular companies, but that favorable tax status comes with some restrictions, reports Dan Caplinger for The Motley Fool.

From a shareholder point-of-view, the rewards of owning a REIT are based on the profits that a company has retained rather than paying out in dividends throughout the time of inception, giving the potential for dividend status.

Given that investors have tended to bid up shares of companies announcing special dividends, getting in before a firm announcement could give you the chance at beating the rush and enjoying some additional share-price appreciation to go with a nice chunk of cash, explains Caplinger.

Vanguard REIT ETF

Tisha Guerrero contributed to this article.