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Bogleheads
Investing Advice Inspired by Jack Bogle
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LH
Joined: 14 Mar 2007
Posts: 2477
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 Posted: Mon Nov 12, 2007 10:18 pm Post subject: Foreign REIT index fund comparison |
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I can never load tables as text so took a snapshot of it. Basically this compares three foriegn passive REIT index funds in terms of ER, market weight method, holdings, and country diversification. Was given at Cincinnati Diehard meeting, but thought it might be useful for anyone thinking about adding foreign REIT.
LH |
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jjkthunder
Joined: 05 Apr 2007
Posts: 134
Location: Green Bay, Wisconsin
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| Posted: Mon Nov 12, 2007 10:52 pm Post subject: Thanks LH |
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Thanks LH for the foriegn REIT index comparison. I have been looking at having 15% of my REIT allocation in foriegn and been leaning towards DRW or RWX.
Today, I finally picked up 120 shares of DRW at $50.76 which will bring my REIT allocation back to balance again in my AA. Don't understand what really happened but I had a limit buy at $50.90 and right at end of day my order was executed at $50.76 which really baffles me how I picked it up .14 cents a share cheaper than my buy limit. I'm NOT complaining but was watching and I got the last 100 shares but below buy price. Can someone explain possibly how this works.
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GLI...................Jack
You can call me anything you want but please don't call me NORMAL |
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gt4715b
Joined: 11 Jun 2007
Posts: 189
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| Posted: Mon Nov 12, 2007 11:18 pm Post subject: |
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A limit buy at X means don't buy if more than X (but you can buy if less than or equal to X). Conversely, a limit sell at X means don't sell if less than X (but you can sell if more than or equal to X).
I always use limit orders especially for those ETFs that have a small daily volume. It protects you against having your order placed at a price much different than what you expected. |
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EmergDoc
Joined: 02 Mar 2007
Posts: 6068
Location: Greatest Snow On Earth
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| Posted: Mon Nov 12, 2007 11:28 pm Post subject: Re: Thanks LH |
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| jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference.
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1) Invest you must 2) Time is your friend 3) Impulse is your enemy
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course |
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Jason
Joined: 01 Mar 2007
Posts: 58
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| Posted: Mon Nov 12, 2007 11:38 pm Post subject: comparing the funds |
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To add to the data comparing the three funds...
After all three of these funds came out, I analyzed the proportion of holdings in each of the indices that are true REITs, as opposed to other types of real estate stocks (such as real estate operating companies, or REOCs). True REITs should be more desirable than other real estate stocks, due to their tendencies to receive more favorable tax treatment. Here's my estimate of the proportion of holdings in true REITs:
DRW: 55%
WPS: 49%
RWX: 45%
cheers,
Jason |
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LH
Joined: 14 Mar 2007
Posts: 2477
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| Posted: Tue Nov 13, 2007 12:26 am Post subject: |
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Jason,
Are you familiar with the REIT laws in the foreign countries? I would assume that REITS would be held in nontaxable account anyway right?
There are about 25 countries that have passed REIT type laws according to one article I read. Now the nature of those laws as compared to US REIT law I do not know, I assume they are pretty similiar, but I cannot read Japanese.
Can you explain more about your analysis, and how you came to your percentages? To me I would guess its a hodgepodge of differences in between US and foreign REIT law. Luckily so far, its mostly Australia, Hong Kong, Japan, and Englands laws one has to worry about. So maybe that makes it easier as one can reasonably just look at 4 countries REIT laws.
Maybe also, the REIT laws are all essentially carbon copies of US REIT law? I would find this remarkable, but perhaps thats the case.
Thanks for help,
LH |
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jjkthunder
Joined: 05 Apr 2007
Posts: 134
Location: Green Bay, Wisconsin
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| Posted: Tue Nov 13, 2007 1:46 am Post subject: Just my reasoning |
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| Quote: | jjkthunder wrote:
I have been looking at having 15% of my REIT allocation in foriegn . |
| Quote: | EmergDoc wrote:
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
I'm still considering the REIT sector to be one asset class which is 5.333 of my entire portfolio. I might eventually go 15 to 25% DRW but for now just 10%(because of taking $6K lastweek from my emerging markets ETF VWO). There is no trouble in rebalancing once a year with a calculator. I feel that if $6000 (10%) goes up 25% and $54,000(90%) went down 13% with this diversification I would have less risk. DRW(up 25%) makes $1500 and VNQ(down 13%) loses $7020 would only equal a $5520 lose in my REIT asset class. If I added $6000 more in VNQ and it went down 13% I potentially could be down $8520 in my REIT asset class.
In fact this year I had 9 asset classes in equal amounts of 5.333%. In 2008 my AA will go to 47/53 and I plan on adding the a 24 ETF commodity index(either GSC or GSG) to make 10 asset classes. Doing this will put my total REIT exposure down to 4.7% but maybe somewhat more because of REIT companies in large,mid and small cap funds. My feeling is the more diversification the better. Thanks for your opinion though because I'm always open to others with their thoughts.
I realize it's not simple but I enjoy working with #'s & %'s. The main thing is I'm sticking to my plan and asset allocation with a few additives for less risk. In saying that I think my commodity index will be GSG because of less risk. I guess it paid off to answer you back EmergDoc. In doing so the risk factor came into my head and the differences between GSC and GSG.
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GLI...................Jack
You can call me anything you want but please don't call me NORMAL |
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Jason
Joined: 01 Mar 2007
Posts: 58
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| Posted: Tue Nov 13, 2007 8:55 am Post subject: |
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| LH wrote: | Jason,
Are you familiar with the REIT laws in the foreign countries? I would assume that REITS would be held in nontaxable account anyway right?
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LH,
No, I'm not that familiar, but in general, most foreign REITs share one thing in common with US REITs--they are, in their home country, given some protection from corporate and trade tax. In return, they are required to pass along a high proportion of their profits to shareholders. This tax treatment should still benefit foreign investors.
Now, the annoying aspect of many foreign REITs is that distributions to foreign share-holders (such as you and me) are usually subject to a tax in that country, e.g. 15-25% in Germany, and if we are holding this in a tax-advantaged account (to avoid US taxation of the dividends), we can't make up for this by taking the foreign tax credit--this is one of the inefficiencies of this asset class. In Australia, not only dividends but also capital gains distributions to foreign shareholders are taxed at very high rates. So, for most foreign REITs, if we hold it in a taxable account, we can take the foreign tax credit to assuage taxation by the foreign country, but we're taxed on the distributions by the US government. If we hold it in a tax-advantaged account, then we avoid taxation by the US government, but we can't take the foreign tax credit, so the distributions are taxed by the foreign government.
As I said, we should still benefit from the fact that these REITs avoid corporate and trade taxes in their home countries. And there are efforts in many of these countries to make the tax laws more favorable to foreign investment, so it should get better with time. And more REIT legislation is being passed all the time in foreign countries, so it is a growing sector. That is why I'm interested in funds that hold more true REITs. But the situation is not ideal, as foreign REITs do not have the full benefits that US REITs do. Hope that helps a bit.
cheers,
Jason |
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SpringMan
Joined: 21 Mar 2007
Posts: 2437
Location: Michigan
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| Posted: Tue Nov 13, 2007 9:24 am Post subject: |
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I recently sold RWX based on Vanguard's certified financial planners recommendation during a portfolio review. He recommended selling, VGPMX, precious metals & mining too, which I still hold. Vanguard's rule of thumb is a maximum of 10% of equities should be in sector funds, 10% total not per fund. They suggested selling health care fund too, which would leave me only VGENX, Energy and VNQ, domestic REITs. This 10% rule seems rather restricting. I only partially complied.
Best,
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SpringMan |
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LH
Joined: 14 Mar 2007
Posts: 2477
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| Posted: Wed Nov 14, 2007 3:55 am Post subject: |
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| Jason wrote: | | LH wrote: | Jason,
Are you familiar with the REIT laws in the foreign countries? I would assume that REITS would be held in nontaxable account anyway right?
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LH,
No, I'm not that familiar, but in general, most foreign REITs share one thing in common with US REITs--they are, in their home country, given some protection from corporate and trade tax. In return, they are required to pass along a high proportion of their profits to shareholders. This tax treatment should still benefit foreign investors.
Now, the annoying aspect of many foreign REITs is that distributions to foreign share-holders (such as you and me) are usually subject to a tax in that country, e.g. 15-25% in Germany, and if we are holding this in a tax-advantaged account (to avoid US taxation of the dividends), we can't make up for this by taking the foreign tax credit--this is one of the inefficiencies of this asset class. In Australia, not only dividends but also capital gains distributions to foreign shareholders are taxed at very high rates. So, for most foreign REITs, if we hold it in a taxable account, we can take the foreign tax credit to assuage taxation by the foreign country, but we're taxed on the distributions by the US government. If we hold it in a tax-advantaged account, then we avoid taxation by the US government, but we can't take the foreign tax credit, so the distributions are taxed by the foreign government.
As I said, we should still benefit from the fact that these REITs avoid corporate and trade taxes in their home countries. And there are efforts in many of these countries to make the tax laws more favorable to foreign investment, so it should get better with time. And more REIT legislation is being passed all the time in foreign countries, so it is a growing sector. That is why I'm interested in funds that hold more true REITs. But the situation is not ideal, as foreign REITs do not have the full benefits that US REITs do. Hope that helps a bit.
cheers,
Jason |
Thanks Jason,
Much appreciated answer. I think most/all of those issues I have heard referenced before, but it never really seems definitive to me. Ditto your answer, though it makes things clearer, there are just too many countries involved and too many tax laws.
Basically, my very rough sense of it is that foriegn REITS should still be held in nontaxable accounts, even with the loss of the FTC, would you agree with this?
How did you get those percentages you got for true reits? Like say Goodman group, or GPT group, or Westfield group, hang land, stockland, sumitomorealty etc? How did you go thru and figure out which ones where "true reits" according to thier countries laws? Did you look at each listing individually and figure out somehow if it met its countries REIT law, or is it listed on a profile somewhere as a true reit, like on yahoo, where others were listed as a reoc? Or is there some master list somewhere for the underlying index, where this has been done already? Any links would be appreciated. The foreign tax credit issue confounds me. I have trouble enough with our tax law without adding on all the other countries too.
Thanks for your help with this topic, its much appreciated,
LH |
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Valuethinker
Joined: 11 May 2007
Posts: 12890
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| Posted: Wed Nov 14, 2007 7:07 am Post subject: Re: Thanks LH |
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| EmergDoc wrote: | | jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
Unless it's a very volatile asset class, or one with 'fat tails' (eg a hedge fund) I'm sure that's right.
The minimum price at the casino is 5% for a chip  . |
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Jason
Joined: 01 Mar 2007
Posts: 58
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| Posted: Wed Nov 14, 2007 10:45 am Post subject: |
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| Quote: | | Basically, my very rough sense of it is that foriegn REITS should still be held in nontaxable accounts, even with the loss of the FTC, would you agree with this? |
Probably, yes, especially if you're in a high tax bracket. If you're in a low tax bracket, it may actually be better to hold them in a taxable account, but then it won't make much of a difference. It's probably pretty close to a wash, but at least if you hold them in a tax-advantaged account, it keeps things simpler (i.e. you don't have to worry about U.S. taxes on the distributions OR the foreign tax credit).
| Quote: | | How did you get those percentages you got for true reits? |
I went to the website of each fund company, and read the info associated with the underlying indices. There, they have summaries of the different real estate industry classes that the index invests in. The industry classes are not always explicitly called "REITs" but with a little reading back and forth between the different index descriptions, you can figure out which classes are REITs and which ones are REOCs or other types of companies. Look at the iShares fact sheet for WPS first, as it is quite explicit.
cheers,
Jason |
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Tramper Al
Joined: 18 Oct 2007
Posts: 3109
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| Posted: Wed Nov 14, 2007 1:04 pm Post subject: Re: Thanks LH |
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| Valuethinker wrote: | | EmergDoc wrote: | | jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
Unless it's a very volatile asset class, or one with 'fat tails' (eg a hedge fund) I'm sure that's right. |
Well, I don't presume to tell other Diehard investors what is and isn't "worth the trouble". I think that is a personal decision and one that I would respect.
If a 0.5% addition to portfolio return is such a trifle, then I would think that the long winded (and repeated) discussions here about differences in ER (say 0.2%), loss of foreign tax credit (say 0.3%) and the cost of commissions to trade ETFs (say 0.1%) would seem even more ridiculous. But I would not be so bold as to tell that to the discussants. At the very least, we would miss out on a lot of interesting discussions that way.
The fact is, it doesn't take too large a portfolio before 0.5% amounts to the cost of a new car, every year. Some might consider that real money.
When the "trouble" of relatively small positions might amount to a few mouse clicks and an entry in MS Money, I would leave it up to each individual to decide for himself or herself. Whether the expected incremental gains amount to pizza money or a Miata, who am I to judge. |
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buyza
Joined: 14 Sep 2007
Posts: 407
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| Posted: Wed Nov 14, 2007 1:40 pm Post subject: Re: Thanks LH |
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| EmergDoc wrote: | | jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
How much work is it to buy an ETF?
I find your logic very flawed. Money is money. I rather earn 33% on 1.5% of my portfolio than have that 1.5% allocated to something earning only 10%.
Ill use myself as an example. 1.5% is roughly 3000 in my portfolio. I have a 50 year horizon.
If I put that 1.5% in a fund that earns even 11% instead of 10% then my returns look like this at retirement.
11% - 553,694
10% - 352,172
so I can give you 200,000 reasons why its worth the "extra work"
Oh and just for fun, if it somehow returned 33% per year:
4.67 million
Of course that isn't likely to happen. However, 1% or even a few more is very possible. |
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kurata
Joined: 01 Oct 2007
Posts: 67
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| Posted: Wed Nov 14, 2007 11:43 pm Post subject: |
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| I'm certainly no expert, but if I recall correctly, the Japanese REIT law was largely copied from the US. So the 90% income distribution rule, etc, applies. The main differences are that land developers can't use the REIT structure, and J-REITS can have more concentrated ownership. I have no idea how the taxation would work for someone in the US. |
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LH
Joined: 14 Mar 2007
Posts: 2477
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| Posted: Thu Nov 15, 2007 6:29 am Post subject: Re: Thanks LH |
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| Tramper Al wrote: | | Valuethinker wrote: | | EmergDoc wrote: | | jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
Unless it's a very volatile asset class, or one with 'fat tails' (eg a hedge fund) I'm sure that's right. |
Well, I don't presume to tell other Diehard investors what is and isn't "worth the trouble". I think that is a personal decision and one that I would respect.
If a 0.5% addition to portfolio return is such a trifle, then I would think that the long winded (and repeated) discussions here about differences in ER (say 0.2%), loss of foreign tax credit (say 0.3%) and the cost of commissions to trade ETFs (say 0.1%) would seem even more ridiculous. But I would not be so bold as to tell that to the discussants. At the very least, we would miss out on a lot of interesting discussions that way.
The fact is, it doesn't take too large a portfolio before 0.5% amounts to the cost of a new car, every year. Some might consider that real money.
When the "trouble" of relatively small positions might amount to a few mouse clicks and an entry in MS Money, I would leave it up to each individual to decide for himself or herself. Whether the expected incremental gains amount to pizza money or a Miata, who am I to judge. |
I would be of the same opinion if its less than 5 percent, its likely not worth it. If its fun asset class or something, thats fine, have fun with the 1 percent allocation. Or perhaps if its some sort or highly leveraged asset, or highly volatile asset, where if things go real bad, you expect it to jump 10 times, then yeah, a say 3 percent part of your portfolio jumping 10 times would produce roughly 27 percent gain right? That would be worth it statistically. But if its just some average stock sector, say 1 percent of a SV fund, or 1 percent of a REIT fund, you gotta ask what you are accomplishing with that 1 percent. Not much in reality. Doesnt seem worth it to me either.
I think the 5 percent "rule" is a pretty good one for portfolios in general, with the possible exception of higly volatile asset classes. |
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tc101
Joined: 20 Feb 2007
Posts: 1393
Location: Atlanta - Retired in 2004 at age 54
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| Posted: Thu Nov 15, 2007 11:50 am Post subject: |
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| So which of these 3 ETFs do you like best, and why? |
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kurata
Joined: 01 Oct 2007
Posts: 67
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| Posted: Thu Nov 15, 2007 10:25 pm Post subject: |
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The trouble is that none of them have a significant track record, so all other things being equal (which in this case pretty much means equally unknown), I guess I'd wait a couple of years. I do hear that voice saying, "Get in now!" but I'm pretty sure that's the same voice that always advocates buying high and selling low
Really, though, aside from market timing, what can you look at to judge them as investments? The only numbers we really have are the ER, which favors WPS; size/volume, which favors RWX; and performance over the past two highly volatile months, which favors DRW (best return, lowest correlation to both the S&P and US domestic REIT funds). Until a clear picture of how these tradeoffs work against each other manifests in longterm return, it's like throwing very expensive darts at a dartboard.
But if someone gave me money and said I had to invest in one of them today, I guess I'd go with DRW for the low-correlation benefit. |
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tc101
Joined: 20 Feb 2007
Posts: 1393
Location: Atlanta - Retired in 2004 at age 54
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| Posted: Thu Nov 15, 2007 11:12 pm Post subject: |
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| Quote: | | I do hear that voice saying, "Get in now!" but I'm pretty sure that's the same voice that always advocates buying high and selling low |
I hear the same voice and you make a good point. There is no reason for me to get in now other than that voice that tells me to buy what has gone up recently. I have enough different asset classes that it is not important to add another. Thanks for your thoughts |
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baw703916
Joined: 01 Apr 2007
Posts: 2353
Location: Northern Virginia
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| Posted: Fri Nov 16, 2007 12:15 am Post subject: |
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DRW seems to be doing a lot better than the others.
The major difference I see in the country distribution is the "% Japan+UK":
DRW: 15.67%
RWX: 33.19%
WPS: 34.97%
So it seems like avoiding these two countries was a good bet (at least over the last few months).
It seems that REITs may well be a case where fundamental weighting by dividends really is the best apprach. The reason is that REITs are obligated to pay out nearly all of their earnings as dividends. A criticism of dividend weighting is that not all stocks pay dividends, so you miss a lot of stocks (even value stocks) if you just focus on dividends. Also, that dividend payout doesn't always have much relation to earnings, or to book value. But for REITs, dividends and earnings are closely related by law. Also, for commercial real estate the value is determined by how much you can charge someone who rents the space (now or in the future).
Best wishes,
Brad
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I don't foresee any Black Swans appearing in the future |
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Valuethinker
Joined: 11 May 2007
Posts: 12890
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| Posted: Fri Nov 16, 2007 5:55 am Post subject: |
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| baw703916 wrote: | DRW seems to be doing a lot better than the others.
The major difference I see in the country distribution is the "% Japan+UK":
DRW: 15.67%
RWX: 33.19%
WPS: 34.97%
So it seems like avoiding these two countries was a good bet (at least over the last few months).
It seems that REITs may well be a case where fundamental weighting by dividends really is the best apprach. The reason is that REITs are obligated to pay out nearly all of their earnings as dividends. A criticism of dividend weighting is that not all stocks pay dividends, so you miss a lot of stocks (even value stocks) if you just focus on dividends. Also, that dividend payout doesn't always have much relation to earnings, or to book value. But for REITs, dividends and earnings are closely related by law. Also, for commercial real estate the value is determined by how much you can charge someone who rents the space (now or in the future).
Best wishes,
Brad |
Your argument re dividend weighting is, I think, a good one.
Since fundamentally what one owns real estate for is rental income (there is price appreciation of land, but buildings by contrast depreciate-- commercial buildings, hotels etc. need complete rebuilds every 30 years or so). And dividends are a crude proxy of rental income.
On Japan, I am more bullish on Japanese commercial RE than UK. Japanese looks like it is at the beginning of an upturn after a 15 year slump.
Also in the UK you have a fundamentally overvalued currency (against anything) and in Japan you have an undervalued currency (against the dollar and the euro).
To be fair, the UK REITs have fallen by 20-25% since their creation in january, and to some extent discount the expected fall in cap rates (property yields). Land Securities, which is as blue chip as say Voranado in the US, is now trading at quite a reasonable rating (4.5% yield, 20% discount to NAV). But UK commercial property has had an extraordinary run in the last 10 years, reflecting a halving of yields/cap rates (take the rental income of a building, divide by the cost, and you get a cap rate). |
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kurata
Joined: 01 Oct 2007
Posts: 67
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| Posted: Sat Nov 17, 2007 9:20 pm Post subject: |
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| Quote: | | Since fundamentally what one owns real estate for is rental income (there is price appreciation of land, but buildings by contrast depreciate-- commercial buildings, hotels etc. need complete rebuilds every 30 years or so). And dividends are a crude proxy of rental income. |
I suppose this is where the question of just what percentage of each fund is really invested in REITs comes into play. Especially in Japan, dividends from regular corporations aren't always good things, and while a fund's selection process could deal with that, I'm not sure where the line would be between indexing and active management. Still, it's a good point, and Jason did find that DRW had the highest percentage of REIT issues.
That voice just keeps whispering... |
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tokyoleone
Joined: 19 Feb 2007
Posts: 344
Location: Tokyo, Japan
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| Posted: Mon Nov 19, 2007 7:45 am Post subject: |
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| tc101 wrote: | | So which of these 3 ETFs do you like best, and why? |
Just glancing at the portfolios, WPS seems to be the most diversified. Not sure I like the fact that DRW has 60% of its portfolio in just 2 countries, Australia and Hong Kong, both of which have been on a tear lately. And WPS does have the lower expense ratio ...
They are all relatively new, so maybe best to wait a while...?
Edit: Hong Kong, technically at least, is no longer a country. |
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tokyoleone
Joined: 19 Feb 2007
Posts: 344
Location: Tokyo, Japan
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| Posted: Mon Nov 19, 2007 4:59 pm Post subject: WPS vs. IFGL |
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And I noticed ishares just opened IFGL, which is the FTSE/NAREIT global real estated ex-US index fund. So now it seems they have not one but two ex-US real estate funds. Why would they do that?
The portfolios of both looked awfully similar when I took a glance at them on ishares website. Though IFGL is called a "Nareit" fund and WPS is a "Property" fund. Is there a difference? The ERs of both are the same - 0.48%, top four holdings the same - Japan, Australia, HK, UK.
I don't quite see the point, unless I'm missing something ..... |
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baw703916
Joined: 01 Apr 2007
Posts: 2353
Location: Northern Virginia
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| Posted: Tue Nov 20, 2007 6:13 pm Post subject: |
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ishares has three different sets of ETFs covering all 9 styles boxes of the U.S. market:
-based on the Russell indices.
-based on the M* indices
-based on the Dow Jones indices
seems ishares is more interested in market share than avoiding redundency. Nor do they apparently have an issue with competing against themselves.
Best wishes,
Brad
_________________
I don't foresee any Black Swans appearing in the future |
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tokyoleone
Joined: 19 Feb 2007
Posts: 344
Location: Tokyo, Japan
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| Posted: Tue Nov 20, 2007 10:10 pm Post subject: |
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| baw703916 wrote: |
Nor do they apparently have an issue with competing against themselves.
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Thanks for the reply. Seems like a silly strategy to me, but then again I don't manage $1.9 trillion in assets. It certainly makes things a bit confusing for the investor who might be interested in choosing one of these options. |
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JackS
Joined: 19 Nov 2007
Posts: 198
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| Posted: Tue Nov 20, 2007 11:53 pm Post subject: |
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I agree with LH about the tax implications of REITs, and I only hold them in my ROTH IRA account.
On performance according YAHOO charts: (I would post the chart link, but I'm new and cannot)
1) WPS
2) DRW
3) RWX |
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DaveTH
Joined: 05 Apr 2007
Posts: 2447
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| Posted: Sun Feb 03, 2008 7:46 pm Post subject: |
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The 2007 tax information for RWX has been published. Looks like 100% of the dividends were qualified and there were no capital gains:
Total Ordinary Dividends (Box 1A) = $1.952978 per share
Total Qualified Dividends (Box 1B) = $1.952978
The above amounts include $0.151434 per share of foreign tax paid |
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schwarm
Joined: 28 Oct 2007
Posts: 558
Location: Lower Alabama
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| Posted: Sun Feb 03, 2008 9:16 pm Post subject: Re: Thanks LH |
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| EmergDoc wrote: | | jjkthunder wrote: | | I have been looking at having 15% of my REIT allocation in foriegn . |
? It doesn't seem enough to justify the work. If you hold 10% REITS, 15% is only 1.5% of your portfolio. Even if it goes up by 33% one year, it only adds 0.5% to the overall portfolio return, which is less than the daily noise.
It is my opinion that if you're not willing to assign at least 5% of your portfolio to a particular asset class, there is no point in owning it at all. Statistically it just doesn't make a difference. |
In Rick Ferri's All About Asset Allocation, his suggested S&D portfolio for mid life accumulators had five sub-classes at less than 5%. |
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Waiting for Godot
Joined: 13 Oct 2007
Posts: 69
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| Posted: Mon Feb 04, 2008 1:35 am Post subject: |
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For what it's worth, I believe FTSE ex North America and TM Intl. have REITs in them. I found Sun Hung Kai Properties, Mitsubishi, and other REIT holdings listed as part of those larger indexes. That enough foreign reits for me.  |
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rich
Joined: 16 Mar 2007
Posts: 905
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| Posted: Mon Feb 04, 2008 2:41 pm Post subject: |
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| DaveTH wrote: | The 2007 tax information for RWX has been published. Looks like 100% of the dividends were qualified and there were no capital gains:
Total Ordinary Dividends (Box 1A) = $1.952978 per share
Total Qualified Dividends (Box 1B) = $1.952978
The above amounts include $0.151434 per share of foreign tax paid |
DaveTH:
I'm not sure how to interpret this. Does this suggest that RWX is holding mostly REITs vs REOCs? Thanks!
_________________
Best regards,
Rich |
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tc101
Joined: 20 Feb 2007
Posts: 1393
Location: Atlanta - Retired in 2004 at age 54
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| Posted: Wed Feb 27, 2008 8:57 pm Post subject: |
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| I have just been reading over all the threads on international REIT ETFs and this seems to be the best, so I would like to bring it up to date. Most of these posts were from Nov 2007. What new information has anyone learned in the last few months? What would you add to what has already been said here? |
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DaveTH
Joined: 05 Apr 2007
Posts: 2447
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| Posted: Wed Feb 27, 2008 9:24 pm Post subject: |
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YTD Performance (2/27/08):
RWX: -3.86%
WPS: -6.71%
DRW: -10.9%
Last edited by DaveTH on Thu Feb 28, 2008 6:30 am; edited 1 time in total |
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tc101
Joined: 20 Feb 2007
Posts: 1393
Location: Atlanta - Retired in 2004 at age 54
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| Posted: Wed Feb 27, 2008 10:43 pm Post subject: |
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| That decline in value is why I am thinking about them again. They are no longer the hot item. People thought they were a great diversifier when they were going up in value. Now that they are cheaper I might think about buying one of them, but I am curious if everyone still thinks they are a great diversifier. |
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