Fidelity: REIT funds

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viz
Posts: 146
Joined: Fri May 04, 2018 11:22 pm

Fidelity: REIT funds

Post by viz » Sun Sep 23, 2018 5:33 pm

Hi,

I always wanted about 20% of my investment in real estate. You can blame on my upbringing outside but I believe RE has a valid place in my invesment portfolio.

I have looked at buying rental properties, notes, syndications, etc. The first 2 are too much work along with my job. I would rather spend time with family than keeping track of different properties. Also, too much concentration of assets in one property. I am in a couple of syndications as I was comfortable with the location (lived there), the sponsor and numbers. The rest I want to put in REITs based on my reading Larry's book about Alternate Investments & my tilt towards asset allocation based on CoffeeHouse Portfolio & Paul Merriman's work.

ok, done with the story. now the question:
My 401k is with Fido and I need a REIT MF/ETF. I am leaning towards
FRXIX: ER: 0.07%
The other alternatives are:
  • VNQ: RE: 0.12% + have to pay trading fees


Which one is recommended? Other suggestions welcome.
Thanks!

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nedsaid
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Re: Fidelity: REIT funds

Post by nedsaid » Sun Sep 23, 2018 5:51 pm

I own the Fidelity REIT index and the Vanguard REIT Index ETF. Satisfied with both.
A fool and his money are good for business.

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jhfenton
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Location: Ohio

Re: Fidelity: REIT funds

Post by jhfenton » Sun Sep 23, 2018 6:30 pm

It seems like an easy decision to use FRXIX at 7 bp versus VNQ at 12 bp + trading fees. In a 401(k), trading fees could add really add up.

viz
Posts: 146
Joined: Fri May 04, 2018 11:22 pm

Re: Fidelity: REIT funds

Post by viz » Sun Sep 23, 2018 8:01 pm

nedsaid wrote:
Sun Sep 23, 2018 5:51 pm
I own the Fidelity REIT index and the Vanguard REIT Index ETF. Satisfied with both.
Thanks! I assume you are referring to FRXIX for Fidelity. Correct?

viz
Posts: 146
Joined: Fri May 04, 2018 11:22 pm

Re: Fidelity: REIT funds

Post by viz » Sun Sep 23, 2018 8:03 pm

jhfenton wrote:
Sun Sep 23, 2018 6:30 pm
It seems like an easy decision to use FRXIX at 7 bp versus VNQ at 12 bp + trading fees. In a 401(k), trading fees could add really add up.
I agree. I am looking for insights into why not. They track different index and FRXIX hasn't existed for very long time.

z3r0c00l
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Re: Fidelity: REIT funds

Post by z3r0c00l » Sun Sep 23, 2018 8:29 pm

REITs are real estate like gold mining stocks are gold. Correlated for sure, but not the same thing. I wouldn't consider it an investment in real estate, just a focus on a specific kind of stock.

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nedsaid
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Re: Fidelity: REIT funds

Post by nedsaid » Sun Sep 23, 2018 10:36 pm

viz wrote:
Sun Sep 23, 2018 8:01 pm
nedsaid wrote:
Sun Sep 23, 2018 5:51 pm
I own the Fidelity REIT index and the Vanguard REIT Index ETF. Satisfied with both.
Thanks! I assume you are referring to FRXIX for Fidelity. Correct?
Yes, that is correct.
A fool and his money are good for business.

Valuethinker
Posts: 36697
Joined: Fri May 11, 2007 11:07 am

Re: Fidelity: REIT funds

Post by Valuethinker » Mon Sep 24, 2018 3:02 am

viz wrote:
Sun Sep 23, 2018 5:33 pm
Hi,

I always wanted about 20% of my investment in real estate. You can blame on my upbringing outside but I believe RE has a valid place in my invesment portfolio.

I have looked at buying rental properties, notes, syndications, etc. The first 2 are too much work along with my job. I would rather spend time with family than keeping track of different properties. Also, too much concentration of assets in one property. I am in a couple of syndications as I was comfortable with the location (lived there), the sponsor and numbers. The rest I want to put in REITs based on my reading Larry's book about Alternate Investments & my tilt towards asset allocation based on CoffeeHouse Portfolio & Paul Merriman's work.

ok, done with the story. now the question:
My 401k is with Fido and I need a REIT MF/ETF. I am leaning towards
FRXIX: ER: 0.07%
The other alternatives are:
  • VNQ: RE: 0.12% + have to pay trading fees


Which one is recommended? Other suggestions welcome.
Thanks!
Taxable location matters a lot with REITs for US investors, as I understand the position.

Basically REIT dividends are tax disfavoured if held in a taxable account.

It's always worth contemplating the chart of the Vanguard REIT fund, 2008-09 vs. the market as a whole, when considering one's REIT allocation.

Note you already probably have quite an exposure to Real Estate - your own home. I believe Vanguard has written about that -- published a paper.

viz
Posts: 146
Joined: Fri May 04, 2018 11:22 pm

Re: Fidelity: REIT funds

Post by viz » Mon Sep 24, 2018 1:56 pm

Valuethinker wrote:
Mon Sep 24, 2018 3:02 am
viz wrote:
Sun Sep 23, 2018 5:33 pm

ok, done with the story. now the question:
My 401k is with Fido and I need a REIT MF/ETF. I am leaning towards
FRXIX: ER: 0.07%
The other alternatives are:
  • VNQ: RE: 0.12% + have to pay trading fees


Which one is recommended? Other suggestions welcome.
Thanks!
Taxable location matters a lot with REITs for US investors, as I understand the position.

Basically REIT dividends are tax disfavoured if held in a taxable account.
Yes, it would be in 401k account only
Valuethinker wrote:
Mon Sep 24, 2018 3:02 am
It's always worth contemplating the chart of the Vanguard REIT fund, 2008-09 vs. the market as a whole, when considering one's REIT allocation.

Note you already probably have quite an exposure to Real Estate - your own home. I believe Vanguard has written about that -- published a paper.
Thanks for the tip. I consider my home as an expense and not an investment & not part of my portfolio. However, I do see your point and will look for the paper by vanguard.

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