Everyday Finance

Warming Up To International Real Estate Funds

Here were some thoughts on DRW which launched earlier this week. I had some readers express concern over such a newly launched instrument, but I think it's a legit move for anyone seeking some international/RE exposure; this is also timely wrt the US interest rate concern raised above.

An additional consideration is that real estate is more of a local phenomena than say, an indicator of overall market returns. Look at the US now (stocks way up since 2005, RE lousy in general). Even when the stock market performed poorly early this decade after the dot-com bust, home prices increased at record levels. Additionally, certain markets are still appreciating today, even though the Miami beaches and Jersey shores, etc. are seeing prices continue to decline. Each of these countries has a different dynamic and the correlation coefficient of real estate returns compared to that of stock market returns in aggregate is much less than 1. I love the diversification and low correlation properties of the ETF in addition to the impressive backtested return.

Warming Up To International Real Estate Funds

Greetings, I did an article on international real estate funds a while back. I thought I'd add one to the mix: "the next fund I want to highlight is Cohen & Steers International Realty A (IRFAX). Now, this fund does carry a 4.5% load, which I normally advise against; and the annual fee is 1.7%. However, this fund performed even better than the EGLRX, so you can practically take your pick." Over the prior two years, even with the load, would have done well with the IRFAX. Had some extra into on oversees REITs; check it out if interested:

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Morningstar report for IRFAX;

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