iShares FTSE NAREIT Mort Plus Cp Idx Message Board
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Pros and Cons owning REM
For those that have held REM for awhile, can you please provide insights on the positive and negatives.
Since REM is supposed to be a mutual fund of mREIT, you won't get laggards holding NLY and watched your capital lose money if bought near its 52-week high.
The yield isn't as great as other mREIT; I'll live with that for some capital appreciation.
Like anything else, you win by buying low and sell high. Target price to get in instead of buying at random dates.
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REM is not a pure play in mREITs. It has exposure to large banking institutions. Whether that is a con or a pro depends on the future. If there is a contagion spread from Europe it will probably be negative. As the banking system continues to heal that gives the probability of appreciation.
- 1 Reply to mmichaelr
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Not so much into banking stocks, not sure where you got that info from - this ETF is pretty much an REIT ETF as you can see here: http://us.ishares.com/product_info/fund/holdings/REM.htm
Beware that 20% of fund is NLY and 20% is in AGNC, about 40% or so of the rest is in 10 of the other top 12 holdings. the other 20% of holding are made up of 15 or so other (smaller) REITS.
Pretty good diversification withing this sector. Much better way to play this sector than just investing in 1-4 stocks IMHO.
Keep in mind it is a sector play. Rates going up will hurt it. Bad news from NLY or AGNC will (obviously) hurt it. Other than that should be a relatively safe place for money - until rates start back up - then be careful.
Buy for the divvy, as stated - not for appreciation. Seems like a good buy under 14, if you can get it under 13.5 - even better - again it's all about the yield!
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Although REM is trading high the stocks in the etf are pretty stable investments so I can see it at least hitting 14.30 if not 15 in a couple of months.
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This more about the divy then cap gains.Use the divy to buy other things.
- 1 Reply to chipin8511
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"than"
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How does the PE of 7 work into the long term appreciation?
- 1 Reply to joemama630
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I have not followed the PE ratios of the held securities enough to comment on that.
I hold REM for divvy,and in the belief that it is a relatively "safe" place to park money as long as interest rates remain low.
Which it appears they will for 2-3 years.
Would welcome any other comments on this, or ETFs in general...
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I love REM for its diversification - a nice lot.
You can buy all, or most individually and save the management fee, but this one's EZ, all IMHO. I own several MREITs, but added this one a few months ago for its diversification and the presumed expertise of their managers- 1 Reply to raymondnmc
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Is there an inverse fund that we could use to economically hedge the price of REM? The options don't seem like a good way to hedge because they are so thinly traded.
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With Bubble Ben on the job there is no downside. Buy, hold, collect the divy while price soars. What's not to like. All good for the next 2 years. 20's here we come.
Sentiment: Strong Buy
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