When REITs Once Again Become Neat

Summary

• Our portfolio has been devoid of any REITs for months now.
• I still consider REITs an integral part of the Protected Principal Retirement Portfolio.
• There are far too many REITs for me to assemble a portfolio of individual stocks.
• Since I consider myself fairly good at evaluating Closed-End Funds; that is the way I have chosen to gain exposure to the REIT sector.
• In this article, I present my thoughts on building a REIT portfolio using selected CEFs to meet our income goals.

Closed-end funds (CEFs) occupy a significant proportion of the Protected Principal Retirement Portfolio (PPRP). Noticeably missing are the presence of any REITs, normally a staple item.

With the possibility of an economic recovery in the works (let's hope so), I have again turned to my research to identifying CEF REITs that would provide suitable exposure to this sector.

I consider REITs to be primarily an income vehicle, with total return being secondary. So I am not looking for CEFs that are going to become two, or three baggers - although I would not feel bad if one or two turned out that way.

CEF REITs

According to cefconnect, the CEF universe consists of nine REIT funds; cefdata also shows nine funds, but one is different than the cefconnect list. So, let's say we have twelve REIT possibilities in which to invest.

Two of the funds on the cefconnect list consist of mortgage REITs, in which I have absolutely no interest. Similarly, the cefdata list also has two funds in which I have no interest - one a mortgage fund, and the second is more of an infrastructure fund.

So, I am left with seven funds for my research:

• Aberdeen Global Premier Properties (AWP)
• CBRE Clarion Global Real Estate Income Fund (IGR)
• Cohen & Steers Quality Income Realty (RQI)
• Cohen & Steers Total Return (RFI)
• Cohen & Steers REIT & Preferred Income Fund (RNP)
• Neuberger Real Estate Securities Income Fund (NRO)
• Nuveen Real Estate Income Fund (JRS)

Let's take a brief look at each:

AWP

AWP advertises itself as a global REIT, and it probably provides the greatest global exposure of all of the seven considered at about 46 percent non-US REITs.

It is currently priced at about 15 percent discount to its net asset value (NAV), uses minimal leverage, and presently yields

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.