A Wonderful Real Estate Investment Trust Fund

By Tom Lydon, ETF Trends

Relief in the form of this year’s 12% decline in 10-year Treasury has lifted real estate investment trusts (REITs) and the corresponding exchange traded funds.

A predictable beneficiary of that trend has been the Vanguard REIT ETF (VNQ), the largest U.S. REIT exchange traded fund (ETF). Signs of a recovering U.S. economy and falling interest rates have been stoking investor interest in REIT ETFs. Only three ETFs have taken in more new assets this than the marketweight-rated VNQ. The fund is up nearly 15% year-to-date.

Rapidly approaching $24 billion in assets under management, VNQ is not just the largest REIT, but the eleventh-largest U.S. ETF overall. As is the case with many Vanguard ETFs, VNQ has gained denizens of loyal followers due to an expansive lineup and low fees.

Fees are crucial in the evaluation of REIT ETFs because VNQ and its primary competitors usually feature top-10 lineups that mirror each other. VNQ charges just 0.1% per year, making it less expensive than 92% of rival funds, according to Vanguard.

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The Vanguard REIT ETF (VNQ) is a component of the D2 Capital Management Multi-Asset Income Portfolio.  Current yield on the portfolio is 5.17% and year to date the portfolio is up 9.99% (as of 18 June 2014).

Disclosure:  I own the D2 Capital Management Multi-Asset Income Portfolio

The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.