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.

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