This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Play Foreign Real Estate With ETFs

Last September, I wrote an article about the RMR Asia Pacific Real Estate Fund (RAP), in which I voiced a negative opinion. This turned out to be very wrong.

Since that article, I have tried to learn more about foreign real estate, and the investment industry has delivered several new exchange-traded products that invest in the space. I'll discuss some of these new products today.

It is worth mentioning that foreign real estate companies do not necessarily have very high yields, such as you might expect with U.S.-listed real estate investment trusts. The REIT structure in the U.S. requires that companies pay out 90% of their earnings to shareholders. Some other countries are starting to implement similar requirements, but in general the funds discussed here hold all manner of real estate companies, which can be different from REITs.

For the Dividend-Minded

The newest fund to list is the WisdomTree International Real Estate (DRW) ETF. It is dividend-weighted and based on an index WisdomTree created to weight the components by their respective dividends. Although no dividends have been paid, it appears that DRW will yield 2.50% (the yield of the index minus the 0.58% expense).

Given the dividend weighting, it probably won't come as a surprise that Australia is the largest country represented, with 33.89% of holdings. Other prominent countries include Hong Kong with 22.19%, Japan with 11.42% and the U.K. with 8.02%.

DRW also gives a lot of its portfolio to its largest holding -- Westfield Group, from Australia, at 8.24%. This seems like a lot for one stock, but many of WisdomTree's funds have a stock or two this heavy. Despite issues in Australia with affordability for homes and lax lending standards, Westfield is a shopping mall operator with more than half of the malls it owns being in the U.S.

An argument could be made that they are levered to the fate of the consumer, but you can decide for yourself the extent to which housing issues will be a problem for Westfield, and by extension DRW.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs