Fidelity REITs

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Justafamilydoc
Posts: 1
Joined: Mon Aug 19, 2019 11:12 am

Fidelity REITs

Post by Justafamilydoc »

1st time poster, long time lurker, does anyone have any experience within the REIT options offered thru Fidelity. Have access to all 32 non-commission funds thru my our 457 at work. Was trying to sort out what was the best option.
User avatar
Sandtrap
Posts: 11741
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Fidelity REITs

Post by Sandtrap »

I'm not aware that Fidelity has an "in house" "REIT Index Fund" similar to Vanguard's VGSLX "Vanguard Real Estate Index Fund Admiral Shares (Expense Ratio 0.12%). . . also as a Vanguard ETF "VNQ".
IMHO: A diversified REIT Index Fund is preferable over single REIT funds.

FYI: more info on REIT's.
NAREIT
https://www.reit.com/
Wiki Bogleheads Wiki: Everything You Need to Know
codedude
Posts: 69
Joined: Thu Jan 26, 2017 9:15 pm

Re: Fidelity REITs

Post by codedude »

Fidelity real estate index fund (ticker FSRNX, exp ratio 0.07%) is a great choice at Fidelity.
DippityDoo
Posts: 163
Joined: Mon May 29, 2017 6:06 pm

Re: Fidelity REITs

Post by DippityDoo »

I have some FREL (ETF with .08 expense ratio)
https://screener.fidelity.com/ftgw/etf/ ... mbols=FREL
GT99
Posts: 378
Joined: Wed Jun 20, 2018 5:26 pm

Re: Fidelity REITs

Post by GT99 »

codedude wrote: Mon Aug 19, 2019 7:32 pm Fidelity real estate index fund (ticker FSRNX, exp ratio 0.07%) is a great choice at Fidelity.
I literally just moved 5% of my portfolio into this today.
User avatar
Sandtrap
Posts: 11741
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Fidelity REITs

Post by Sandtrap »

codedude wrote: Mon Aug 19, 2019 7:32 pm Fidelity real estate index fund (ticker FSRNX, exp ratio 0.07%) is a great choice at Fidelity.
Thanks!!
J
Wiki Bogleheads Wiki: Everything You Need to Know
renegade06
Posts: 285
Joined: Sat Jan 12, 2019 3:00 pm

Re: Fidelity REITs

Post by renegade06 »

is it better to hold a REIT in a retirement account or non-retirement? Or does it matter much? I'm in the 37% tax bracket. 43 y.o.
User avatar
Sandtrap
Posts: 11741
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Fidelity REITs

Post by Sandtrap »

renegade06 wrote: Tue Aug 20, 2019 11:13 am is it better to hold a REIT in a retirement account or non-retirement? Or does it matter much? I'm in the 37% tax bracket. 43 y.o.
Thread on the 20% QBI deduction and tax efficiency.
viewtopic.php?t=276749
Wiki Bogleheads Wiki: Everything You Need to Know
renegade06
Posts: 285
Joined: Sat Jan 12, 2019 3:00 pm

Re: Fidelity REITs

Post by renegade06 »

Thanks, Sandtrap!
hale2
Posts: 254
Joined: Sat Feb 15, 2014 5:54 pm

Re: Fidelity REITs

Post by hale2 »

Sandtrap wrote: Mon Aug 19, 2019 7:21 pm I'm not aware that Fidelity has an "in house" "REIT Index Fund" similar to Vanguard's VGSLX "Vanguard Real Estate Index Fund Admiral Shares (Expense Ratio 0.12%). . . also as a Vanguard ETF "VNQ".
IMHO: A diversified REIT Index Fund is preferable over single REIT funds.

FYI: more info on REIT's.
NAREIT
https://www.reit.com/
A couple of months ago you were considering purchasing individual REITs in a couple of different sectors. Did you decide against that and just stick with VNQ? I have funds coming from the sale of an investment property and I'm debating between buying more VNQ or a few individual REITs.
User avatar
Sandtrap
Posts: 11741
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Fidelity REITs

Post by Sandtrap »

hale2 wrote: Tue Aug 20, 2019 3:53 pm
Sandtrap wrote: Mon Aug 19, 2019 7:21 pm I'm not aware that Fidelity has an "in house" "REIT Index Fund" similar to Vanguard's VGSLX "Vanguard Real Estate Index Fund Admiral Shares (Expense Ratio 0.12%). . . also as a Vanguard ETF "VNQ".
IMHO: A diversified REIT Index Fund is preferable over single REIT funds.

FYI: more info on REIT's.
NAREIT
https://www.reit.com/
A couple of months ago you were considering purchasing individual REITs in a couple of different sectors. Did you decide against that and just stick with VNQ? I have funds coming from the sale of an investment property and I'm debating between buying more VNQ or a few individual REITs.
Individual REIT's, like individual stock funds, represent a "single point of failure" SPF.
The point of diversification as encouraged on this forum is to minimize risk.
Thus, VNQ, or as pointed out earlier, for Fidelity, FSRNX.

IMHO: the REIT industry is evolving rapidly so there's a lot of volatility. Index REIT's minimize this.
j
Wiki Bogleheads Wiki: Everything You Need to Know
User avatar
onthecusp
Posts: 813
Joined: Mon Aug 29, 2016 3:25 pm

Re: Fidelity REITs

Post by onthecusp »

I also use FREL ETF in Fidelity. Not to suggest market timing, but it seems kind of high. I think the yield is about 3.5% though so that is good.
Andrew321
Posts: 114
Joined: Sat Nov 10, 2018 11:10 am

Re: Fidelity REITs

Post by Andrew321 »

codedude wrote: Mon Aug 19, 2019 7:32 pm Fidelity real estate index fund (ticker FSRNX, exp ratio 0.07%) is a great choice at Fidelity.
+1, I used to own it before I simplified to a total market strategy.
User avatar
Ice-9
Posts: 1496
Joined: Wed Oct 15, 2008 12:40 pm
Location: Rockville, MD

Re: Fidelity REITs

Post by Ice-9 »

Late to the thread, but echoing the posts above...

I'd held the ETF from Fidelity FREL for a few years in my BrokerageLink account until last year, when Fidelity made the big index fund changes to better compete with Vanguard. On their promotional chart I saw FSRNX with an ER of 0.070% and quickly switched out my REIT allocation for that. Very happy with the fund.
User avatar
zonto
Posts: 223
Joined: Tue Aug 24, 2010 3:45 pm
Location: Boston, MA

Re: Fidelity REITs

Post by zonto »

For some reason over the last couple years the Dow Jones index that FSRNX tracks has been underperforming the MSCI index that VNQ/VGSLX and FREL track. It’s not clear to me why, as neither index is a pure REIT index and both include REOCs.

Any ideas?

Edit: In case anyone reads this post later, the above performance is not limited to FSRNX but appears to be a Dow Jones index construction point as compared to the MSCI indices. FSRNX performance has tracked the performance of the Schwab US REIT ETF (SCHH) nearly identically, which follows a similar index.
"For real-world portfolios, the main impact of diversification is to narrow the dispersion of outcomes. [T]he most important impact is to make the worst outcomes less bad." (Vineviz)
SpideyIndexer
Posts: 546
Joined: Thu Apr 02, 2015 10:13 pm

Re: Fidelity REITs

Post by SpideyIndexer »

I just noticed the same thing. Since April 2019 VNQ has performed much better. The sector compositions are quite different, for example VNQ holds 41.7% Specialty REITs vs. 4.42% for FSRNX. An investment of 10K in 1/1/2012 would be worth $19,873 today for VNQ vs. 17,241 for FSRNX. This could be a "recency" artifact. I haven't yet dug into studying the DJ vs MSCI index to understand why they appear to be so different.
92irish
Posts: 254
Joined: Thu Mar 01, 2007 12:05 pm

Re: Fidelity REITs

Post by 92irish »

Zonto: The index used by FSRNX (Dow Jones US Select Real Estate Index) did not previously include net lease REITs (such as Realty Income, WP Carey, National Retail Property, and others), nor did it include specialized REITs that owned things like cell towers (such as American Tower and Crown Castle). These sectors have done well over the last few years, and thus I suspect without them the Dow Jones US Select Real Estate Index did not perform well versus an index that did have them. So, it was index construction issue that caused the variance in performance not the fund itself.

Now, a couple months ago the Dow Jones US Select Real Estate Index (that FSRNX follows) added net lease REITs. Which I think is a positive addition. However, Dow Jones US Select Real Estate Index does not yet still include cell towers type specialized REITs. These types of REITS sailed through COVID without issue, but now are pretty pricey vis-a-vis traditional real estate REITs.

Fidelity's REIT ETF (FREL) on the other hand uses an index similar to (if not the same one) as Vanguard's REIT mutual fund/ETF VNQ. Those funds have very similar performance and include the specialty REITS like cell towers.
memcpy
Posts: 50
Joined: Fri Nov 28, 2014 9:10 pm

Re: Fidelity REITs

Post by memcpy »

+1 for FREL. Its ER (0.08%)is less compared to VNQ
User avatar
zonto
Posts: 223
Joined: Tue Aug 24, 2010 3:45 pm
Location: Boston, MA

Re: Fidelity REITs

Post by zonto »

92irish wrote: Fri Sep 11, 2020 3:00 pm Zonto: The index used by FSRNX (Dow Jones US Select Real Estate Index) did not previously include net lease REITs (such as Realty Income, WP Carey, National Retail Property, and others), nor did it include specialized REITs that owned things like cell towers (such as American Tower and Crown Castle). These sectors have done well over the last few years, and thus I suspect without them the Dow Jones US Select Real Estate Index did not perform well versus an index that did have them. So, it was index construction issue that caused the variance in performance not the fund itself.

Now, a couple months ago the Dow Jones US Select Real Estate Index (that FSRNX follows) added net lease REITs. Which I think is a positive addition. However, Dow Jones US Select Real Estate Index does not yet still include cell towers type specialized REITs. These types of REITS sailed through COVID without issue, but now are pretty pricey vis-a-vis traditional real estate REITs.

Fidelity's REIT ETF (FREL) on the other hand uses an index similar to (if not the same one) as Vanguard's REIT mutual fund/ETF VNQ. Those funds have very similar performance and include the specialty REITS like cell towers.
Thanks for this. As luck would have it, I received in the mail today a notice regarding change of investment policy for the Fidelity Real Estate Index Fund. As of December 1, 2020, Fidelity will move from the Dow Jones U.S. Select Real Estate Securities Index to the MSCI US IMI Real Estate 25/25 Index. Oddly enough, when I Google for this index, I get only hits for the 25/50 index (which is the MSCI index that Vanguard's real estate index tracks), so a bit confused on that.
"For real-world portfolios, the main impact of diversification is to narrow the dispersion of outcomes. [T]he most important impact is to make the worst outcomes less bad." (Vineviz)
SpideyIndexer
Posts: 546
Joined: Thu Apr 02, 2015 10:13 pm

Re: Fidelity REITs

Post by SpideyIndexer »

Yes ditto. Have you bugged Fidelity for an explanation of the 25/25 index?
User avatar
zonto
Posts: 223
Joined: Tue Aug 24, 2010 3:45 pm
Location: Boston, MA

Re: Fidelity REITs

Post by zonto »

SpideyIndexer wrote: Mon Sep 28, 2020 7:13 pm Yes ditto. Have you bugged Fidelity for an explanation of the 25/25 index?
I have not. Easy enough to check the fund info page in December. It's probably just a typo.
"For real-world portfolios, the main impact of diversification is to narrow the dispersion of outcomes. [T]he most important impact is to make the worst outcomes less bad." (Vineviz)
Post Reply