Real Estate Funds Fell In 2018

Over time, the Real Estate Investment Funds has become a major source of financial benefits. Especially for investors who are not interested in the conventional brick and mortal form of real estate investment. Most people who invest in REITs enjoy the advantage of being able to invest in publicly traded stock.

However, in 2018, there was not much protection for investors as the Real Estate Funds Fell by 6.16%. Real-estate investment trusts are a diversification play for investors. But in 2018, they didn’t provide much protection. Real-estate-focused mutual funds and exchange-traded funds fell 6.16% on average for the year, due to a decline during the December market tumult, according to Lipper data. The S&P 500 index fell 6.24%.

Deborah Fuhr, the managing partner at ETFGI, a research and consulting firm, says there were 48 U.S. real-estate ETFs, with total assets of $66 billion, from 23 providers on three exchanges at the end of November 2018.

According to ETFGI data, the top five real-estated-focused ETFs are Vanguard Real Estate ETF (VNQ), followed by Vanguard Global ex-U.S. Real Estate ETF (VNQI), Schwab U.S. REIT ETF (SCHH), iShares Real Estate (IYR) and Real Estate Select Sector SPDR Fund (XLRE).

“Investors are using real estate in the form of ETFs to build out their portfolios, and further diversify without having to deal with any form of property management or upfront costs that other avenues of real-estate investing require,” says Sean O’Hara, president of Malvern, Pa.-based Pacer ETFs Distributors, which launched three new REIT ETFs in 2018, including Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR).

Mr. O’Hara says the data and infrastructure part of the real-estate market has potential to grow more rapidly than the overall real-estate market.

In addition to diversification, real estate can provide a potentially attractive income stream. The inflows into real-estate ETFs are driven by investors looking for competitive yields, as well as assets that aren’t directly correlated to the stock market, some ETF insiders say.

Mr. O’Hara says VNQ and IYR are both broad-based real-estate ETFs, meaning they follow indexes that encompass all of the different types of real estate, including apartments, office space, malls and health-care facilities.


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