Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect real estate companies to prosper over time, especially as the world's economies recover more, the iShares NAREIT Real Estate 50 ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.48%. The fund is fairly small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has performed rather well, trouncing the world market over the past three and five years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of 19%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several real-estate companies had strong performances over the past year. Realty Income
Paying much higher dividends but with more risk to them are mortgage REITs Annaly Capital
Timber and forest products giant Weyerhaeuser
The big picture
Demand for real estate isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.
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