Real Assets - High Yield / Equity Diversifier

Real Estate Investment Trusts (REITs)

Why Invest in Real Estate Investment Trusts (REITs)?

REITs are considered part of the stock allocation of a portfolio, but, since they follow the real estate market, aren't as highly correlated to the overall market. NOTE: Some of the assets in this category are stocks, not ETFs.

Implementation Strategy

Can be used as part of the equity portion of a portfolio since REITs are less correlated with the rest of the equity market. The ETFs are composed of actual REIT stocks and offer diversification across sectors. REIT ETFs are not generally equally weighted across sectors so the other approach would be to buy individual REIT stocks to the weighting you want.

Tax & Account Location Guidance

HOLD IN IRA: REIT dividends are generally taxed as ordinary income but they do get special tax treatment in a taxable account under Section 199A.

Fund Symbol Type Expense Ratio Market Cap / AUM Live Price Index / Benchmark / Notes
Vanguard Real Estate ETF VNQ ETF 0.13% $70.8B $89.50 MSCI US Investable Market Real Estate Index US broad real estate ETF
Schwab U.S. REIT ETF SCHH ETF 0.07% $10.6B $21.95 Dow Jones Equity All REIT Capped Index Excludes mortgage REITs; Lowest expense ratio
iShares U.S. Real Estate ETF IYR ETF 0.37% $4.1B $94.77 Dow Jones U.S. Real Estate Capped Index US market broad index
iShares Global REIT ETF REET ETF 0.14% $4.6B $25.64 FTSE EPRA Nareit Global REITS Net TR Index Global real estate exposure
Realty Income Corporation O Stock N/A $50.5B $54.13 Net Lease Retail REIT 13,100+ net lease properties; Monthly dividends
American Tower Corp. AMT Stock N/A $75.6B $162.20 Cellular Infrastructure REIT Worldwide wireless communications towers
Digital Realty Trust, Inc. DLR Stock N/A $66.1B $178.55 Data Center REIT Global data center infrastructure
Gaming and Leisure Properties GLPI Stock N/A $10.7B $37.68 Casino & Hospitality REIT Gaming property real estate
Iron Mountain Incorporated IRM Stock N/A $33.7B $113.39 Data & Physical Storage REIT Records management & data centers
Lamar Advertising Company LAMR Stock N/A $14.6B $144.12 Outdoor Advertising REIT Billboard & transit advertising REIT
Public Storage PSA Stock N/A $52.9B $283.81 Self-Storage REIT Self-storage facility network
Ventas, Inc. VTR Stock N/A $40.8B $84.01 Healthcare REIT Senior housing and medical office buildings