This Real Estate ETF Could be a Home for Your Money

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

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.

IYRAbout 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%.

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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.

 

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Stock investing expert Chris Versace explains how to pick up coveted stocks at lower prices by taking advantage of the market's slow start to 2016.

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