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Does anyone hold international real estate in their AA?
Old 04-17-2007, 10:18 PM   #1
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Does anyone hold international real estate in their AA?

I am just wondering if anyone holds international real estate as a slice of their portfolios?

I saw that there is a relatively new ETF called streetTRACKS DJ Wilshire International Real Estate ETF (RWX) ER 0.6%

It looks like it has quite a run-up as of late, as do every other class, but wondered if anyone was actively adding it as a core holding in their allocations.

Just wondering!
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Re: Does anyone hold international real estate in their AA?
Old 04-17-2007, 10:25 PM   #2
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Re: Does anyone hold international real estate in their AA?

Hi Olav,

I have not been willing to pay the high expense ratios. I researched this back in the early 2000's when there were fewer options.

Also, there is the tax problem. Most REIT-type dividends are not qualified and the dividends are high, also -- so you pay a lot of taxes in a taxable account. But if you put it into a tax deferred account you lose the foreign tax credit, which is probably another 0.2% drag.

This is actually an important asset class. Real estate is underrepresented in the public markets, and probably more so in foreign and developing markets, respectively.

I have read experts who say about 40% of all real estate price changes are global in nature (as we are seeing now). The rest is more country and region specific.

Kramer
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Re: Does anyone hold international real estate in their AA?
Old 04-17-2007, 11:12 PM   #3
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Re: Does anyone hold international real estate in their AA?

Check out FIREX as an approach to foreign RE.
I've held it in a couple of accounts since its' inception which has only been a couple of years, but during that time it has done a good job compared to like funds.
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Re: Does anyone hold international real estate in their AA?
Old 04-18-2007, 07:55 AM   #4
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Re: Does anyone hold international real estate in their AA?

I hold 10% of port in IGR. Bit expensive, but still yielding over 6%...
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Re: Does anyone hold international real estate in their AA?
Old 04-18-2007, 08:12 AM   #5
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Re: Does anyone hold international real estate in their AA?

I closed out domestic RE a while back and international is the only thing I have for RE now in my portfolio. IGR and RWF are the only closed end funds I know and I own some of both and they have done very well recently - which may make them expensive now. (They both are also include US as well as foreign REITs).

I have also eased into a small position in RWX which has also done well.

I don't think the ER on any of these is excessive for an international investment. And they have certainly more than covered the cost recently.
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Re: Does anyone hold international real estate in their AA?
Old 04-18-2007, 11:30 AM   #6
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Re: Does anyone hold international real estate in their AA?

Quote:
Originally Posted by JPatrick
Check out FIREX as an approach to foreign RE.
I've held it in a couple of accounts since its' inception which has only been a couple of years, but during that time it has done a good job compared to like funds.
ditto

I hold firex (about 1/3 of my RE allocation) and have been very pleased.
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Re: Does anyone hold international real estate in their AA?
Old 04-18-2007, 06:32 PM   #7
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Re: Does anyone hold international real estate in their AA?

Not any more. Got rid of both domestic and international RE allocations in the interest of tax efficiency.
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