iShares Global REIT ETF (REET)

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Jagman
Posts: 119
Joined: Sat Jul 19, 2008 4:38 pm

iShares Global REIT ETF (REET)

Post by Jagman »

https://www.ishares.com/us/products/268752/

This ETF seems like a good option, if investors want to diversify their REIT exposure outside the United States. About 35% of this ETF is composed of international REITs. Expense ratio is a low .14%. Unlike Vanguard's Global ex-US Real Estate ETF (VNQI), REET appears to be marketed as a pure REIT ETF.

Questions: Is the pure-REIT marketing true? If true, does it make a difference? A US REIT must distribute at least 90 percent of its taxable income as dividends. Does the same rule apply to international REITs?

Thanks.
alex_686
Posts: 6833
Joined: Mon Feb 09, 2015 2:39 pm

Re: iShares Global REIT ETF (REET)

Post by alex_686 »

Many countries have REITs - tax advantaged treatment for publicly traded real estate. The actual rules vary hugely between different countries. So, pure real estate, probably yes. 90% distribution, probably no.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
coincollector
Posts: 33
Joined: Mon Jul 03, 2017 6:02 pm

Re: iShares Global REIT ETF (REET)

Post by coincollector »

The main competitor for REET is RWO from SPDR. It is a much bigger fund but charges a massive 50 basis points versus the 14 basis points for REET. I have the same concern with both of them however, they use a very loose sampling methodology to track their indexes. To me this makes them more of a partial index fund. That being said I do own a few shares of REET. It is nice to have global exposure in a single package but my hope is that they will start to replicate their index better as they gain assets. For more information you can check out this link http://www.etf.com/REET?nopaging=1 and click on the Fit tab. As you will see REET only holds 266 of the 934 constituents of its index. They've also heavily overweighed the US and Commercial REITs. Not necessarily reasons to shy away from this ETF but it is always good to know what your buying.
Valuethinker
Posts: 41140
Joined: Fri May 11, 2007 11:07 am

Re: iShares Global REIT ETF (REET)

Post by Valuethinker »

Jagman wrote:https://www.ishares.com/us/products/268752/

This ETF seems like a good option, if investors want to diversify their REIT exposure outside the United States. About 35% of this ETF is composed of international REITs. Expense ratio is a low .14%. Unlike Vanguard's Global ex-US Real Estate ETF (VNQI), REET appears to be marketed as a pure REIT ETF.

Questions: Is the pure-REIT marketing true? If true, does it make a difference? A US REIT must distribute at least 90 percent of its taxable income as dividends. Does the same rule apply to international REITs?

Thanks.

I'd read the Prospectus carefully, but yes it's quite possible it is true.

There will be variations as to tax rules. Australia for example uses imputation on all dividends (i.e. offsetting tax credit against corporation tax paid). But generally around the 90% mark. Otherwise significant tax leakage for the tax authority.

REITs are not all that common outside USA. UK has had them since 2003 I think. Japan has them. Australia and Hong Kong are 2 other big countries with. Canada. Singapore I think.
Topic Author
Jagman
Posts: 119
Joined: Sat Jul 19, 2008 4:38 pm

Re: iShares Global REIT ETF (REET)

Post by Jagman »

Valuethinker wrote:
Jagman wrote:https://www.ishares.com/us/products/268752/

This ETF seems like a good option, if investors want to diversify their REIT exposure outside the United States. About 35% of this ETF is composed of international REITs. Expense ratio is a low .14%. Unlike Vanguard's Global ex-US Real Estate ETF (VNQI), REET appears to be marketed as a pure REIT ETF.

Questions: Is the pure-REIT marketing true? If true, does it make a difference? A US REIT must distribute at least 90 percent of its taxable income as dividends. Does the same rule apply to international REITs?

Thanks.

I'd read the Prospectus carefully, but yes it's quite possible it is true.

There will be variations as to tax rules. Australia for example uses imputation on all dividends (i.e. offsetting tax credit against corporation tax paid). But generally around the 90% mark. Otherwise significant tax leakage for the tax authority.

REITs are not all that common outside USA. UK has had them since 2003 I think. Japan has them. Australia and Hong Kong are 2 other big countries with. Canada. Singapore I think.
Thanks. REET seems like a good option.
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