With the emergence of ETF investing over the past two decades, a variety of new investment strategies have been invented that create value for investors across the globe. While Real Estate Investment Trusts (REITs) have been around for many years, REIT ETFs have emerged as a primary method for investors to gain exposure to real estate investing with low barriers to entry. As diversification continues to remain a persistent strategy to manage risk within a portfolio, REIT ETFs are a great investment tool to attempt to mitigate risk and add new exposures to your overall investments.
Real Estate Investment Trusts, also known as REITs, are defined as publicly traded companies that own, finance or operate income-generating real estate. The appeal for investing in a REIT is that these trusts provide income to investors without them having to actively partake in owning or operating the actual property themselves. There are many types of properties that REITs are invested in - including homes, mortgages, hospitals, and other general forms of infrastructure.
REIT ETFs are similar in that they primarily invest opportunities in real estate; however, they are different in that they create a basket of multiple investments that generate a passive, diversified approach to real estate investing. With generally lower costs of entry in comparison to other REITs and private equity, this allows ordinary investors to partake in this type of strategy. These forms of ETFs often track REIT indexes to generate returns for their investors, and invest a large proportion of their assets under management into different forms of infrastructure, both domestically and internationally.
Within the MVT Common Fund, we offer our investors a multitude of different ETFs aimed at giving them an opportunity to invest in this unique space. Schwab’s U.S REIT ETF (SCHH), as well as IShares International Development Property ETF (WPS), give our clients exposure to real estate investing both domestically and globally. Backing our beliefs of safety of principal, diversification, and liquidity, we are confident that exposure in these ETFs align with the overall goals of the Common Fund.
About the Author
Mr. Fisher joined the firm in 2022 as an Investment Intern. He is now an Investment Analyst at MVT who graduated Cum Laude from the University of Illinois at Chicago in December, 2022. He chose to work at MVT because he enjoys the close-knit environment of the firm and the opportunity to grow within the financial industry.
Before joining the firm, Dylan gained experience as an investment analyst for the Portfolio Management Team at UIC. Within the club, his role was to assist the healthcare sector in analyzing and selecting the holdings within the club’s overall portfolio.
Dylan currently resides in Chicago. In his free time, Dylan enjoys playing basketball, collecting vintage clothing, and spending time with his family.