Or . . . do we REALLY need another asset class to make rebalancing a bigger headache? Still, I'm throwing the idea out there. Factors:
International: Many investors are seeking to increase their exposure to markets outside the US, believing that the these markets either hold better long-term growth potential than the US, or at least they may be sufficiently low correlation to US equity prices as to reduce the overall portfolio volatility. Also, owning foreign equities/properties valued in foreign currencies may be good thing when the dollar falls (of course, this would have been a good inspiration to have BEFORE the dollar fell--but we're talking about long-term investing here)
Real Estate: In general, a good thing to own, and a good inflation hedge. And, with the international RE markets having been battered a little over the last year or so, at least one wouldn't be buying in at the very top.
Structural Factors favoring appreciation of the asset class: The REIT model is new to many countries outside the US, and some analysts believe foreign RE prices will climb as new capital flows into the market-looking to buy RE through the vehicle of REITS in these nations. So, getting in early (now) might be a good thing.
So, opinions are solicited on this asset class/category/thang. Is it worth making an effort to get 5% of holdings into it, or is it sufficient to own international stocks and know that there'll be a few property ownership corporations in that basket. Can someone point me toward a source on correlations of this asset category with other common asset classes?
Here's a blurb on International REITS from Frank Armstrong's latest newsletter. http://www.tinyurl.com/22jl4r
This source provides information on correlations between developed-world international RE and US RE. The correlations are fairly low, so it doesn't appear that owning US REITs is a substitute for owning foreign REITs. http://www.tinyurl.com/3xqlz7
If I wanted to buy into this class, I'd probably go with Fidelity' International Real Estate (FIREX). A .96 ER, which doesn't strike me as outrageous (for an international fund that is managed). And, while it was up 42% in 2006
, it was down over 8% in 2007 and almost 5% in January 2008 alone . There's still time to jump on the plummeting elevator!
International: Many investors are seeking to increase their exposure to markets outside the US, believing that the these markets either hold better long-term growth potential than the US, or at least they may be sufficiently low correlation to US equity prices as to reduce the overall portfolio volatility. Also, owning foreign equities/properties valued in foreign currencies may be good thing when the dollar falls (of course, this would have been a good inspiration to have BEFORE the dollar fell--but we're talking about long-term investing here)
Real Estate: In general, a good thing to own, and a good inflation hedge. And, with the international RE markets having been battered a little over the last year or so, at least one wouldn't be buying in at the very top.
Structural Factors favoring appreciation of the asset class: The REIT model is new to many countries outside the US, and some analysts believe foreign RE prices will climb as new capital flows into the market-looking to buy RE through the vehicle of REITS in these nations. So, getting in early (now) might be a good thing.
So, opinions are solicited on this asset class/category/thang. Is it worth making an effort to get 5% of holdings into it, or is it sufficient to own international stocks and know that there'll be a few property ownership corporations in that basket. Can someone point me toward a source on correlations of this asset category with other common asset classes?
Here's a blurb on International REITS from Frank Armstrong's latest newsletter. http://www.tinyurl.com/22jl4r
This source provides information on correlations between developed-world international RE and US RE. The correlations are fairly low, so it doesn't appear that owning US REITs is a substitute for owning foreign REITs. http://www.tinyurl.com/3xqlz7
If I wanted to buy into this class, I'd probably go with Fidelity' International Real Estate (FIREX). A .96 ER, which doesn't strike me as outrageous (for an international fund that is managed). And, while it was up 42% in 2006
, it was down over 8% in 2007 and almost 5% in January 2008 alone . There's still time to jump on the plummeting elevator!
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