Exchange Traded Funds (ETFs)

This Real Estate ETF Could be a Home for Your Money

This week’s exchange-traded fund (ETF) spotlight for income and dividend investors focuses on the iShares U.S. Real Estate ETF (IYR), a “fund of funds” that gives investors broad-based exposure to some of the best real estate investment trusts (REITs) operating in the market today.

View the current price, volume, performance and top 10 holdings of IYR at ETFU.com.

REITs are a fantastic tool for generating yield, and IYR is a way for investors to gain access to a number of them all in one place. The fund tracks the Dow Jones U.S. Real Estate Index, which measures the performance of the real estate market in the United States. While the majority of components for the real estate index are various types of REITs, there are also a selection of large-, mid- and small-capitalization companies included in the index, plus some real estate holding and development trusts.

IYR was down slightly in 2015, experiencing a 3% loss in its share price. However, the fund has risen nearly 8% in the past few months in spite of all the uncertainty and tension that persists in the market. In addition, the fund paid a dividend of $2.94 per share in 2015, amounting to a solid 4% yield. If the overall market can stabilize and find its footing again, IYR may be looking at a good year in 2016. IYR’s expense ratio currently sits at 0.43%, and the fund has some $4.7 billion in assets under management.

About 95% of IYR’s total assets are invested in REITs. However, each individual holding is fairly small. Some of the most significant holdings include Simon Property Group REIT Inc. (SPG), 7.08%; American Tower REIT Corp (AMT), 4.83%; Public Storage REIT (PSA), 4.29%; Equity Residential REIT (EQR), 3.5%; and Crown Castle International REIT Corp. (CCI), 3.39%.

If you’re looking to generate income by investing in real estate and REITs, iShares U.S. Real Estate ETF (IYR) could be a good pick for 2016.

Remember to look for the current price, volume, performance and top 10 holdings of IYR at ETFU.com.

If you want my advice about buying and selling specific ETFs, including appropriate exit points, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/