Warming Up To International Real Estate Funds

Includes: AWP, DRW, IGR, RAP, RWF, RWX
by: Roger Nusbaum

Last September I wrote an article for TheStreet.com pooh-poohing the RMR Asian Pacific Real Estate Fund (NYSEMKT:RAP). This was a bad call.

Lately I have been learning about, and warming up to the idea of adding a little bit of of international real estate, probably not RAP however, to client portfolios.

I am trying to learn about the various products out there. Alpine has a CEF (NYSE:AWP) and an OEF [EGLRX]. StateStreet has the SPDR DJ Wilshire Intl Real Estate ETF (NYSEARCA:RWX). There is the ING Clarion Global Real Estate Fund (NYSE:IGR), Cohen & Steers Worldwide Realty Income (RWF) and WisdomTree has an ETF (NYSEARCA:DRW) that came out on Tuesday, and could yield in the mid-threes or higher.

I have also looked at several individual stocks. I'm sure I am missing several exchange traded products, and other than EGLRX I didn't look for OEFs.

I am always on a quest for asset classes that have a low correlation to U.S. equities, and may also have a little yield. RWX does not really have much yield, but as I mentioned, the WisdomTree product looks like it will.

croatiaMy inclination at this point, which is still early in the learning process, would be to allocate 2% to a combo of a fund and an individual stock from a country I liked from a top down perspective, and if there was a stock that I would want to own from the bottom up. Obviously this sort of mix will not fit in all accounts, so in those cases I would just go with the fund.

The picture at the right is one I found on the net of T's favorite real estate spot, Croatia. While I can't find an exchanged traded anything that isolates Croatia (open to suggestion), every picture that involves water from there looks spectacular. This of course may not mean anything in terms of investment merit.

If you know of any funds that I missed, please leave the ticker in the comments.