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ETF Chart of the Day: Global Real Estate

tlydon@globaltrend.com (Tom Lydon)

The rally in emerging markets has contributed to solid returns in the Global REIT space, which is rather well represented these days in the ETF universe with a number of potential investment choices.

Currently, the most popular fund in the category is SPDR DJ International Real Estate (NYSEArca: RWX), with more than $2.5 billion in assets under management and trading well over 500,000 shares daily.

Other funds in the space include iShares FTSE EPRA/NAREIT Global Real Estate ex- U.S (NasdaqGM: IFGL), SPDR DJ Global Real Estate (NYSEArca: RWO), Vanguard Global ex-US Real Estate (NasdaqGM: VNQI), iShares S&P World ex-US Property (NYSEArca: WPS), WisdomTree Global ex-US Real Estate (NYSEArca: DRW), First Trust FTSE EPRA/NAREIT Global Real Estate (NYSEArca: FFR), Cohen & Steers Global Realty Majors (NYSEArca: GRI), iShares FTSE EPRA/NAREIT Asia (NasdaqGM: IFAS), Guggenheim China Real Estate (NYSEArca: TAO) and iShares FTSE EPRA/NAREIT Europe (NasdaqGM: IFEU).

One can see quickly simply by reviewing the titles of the aforementioned funds that depending on the specific part of the world the investor wants exposure to in terms of their local REIT markets, in most cases, the funds are available. [New ETF Tracks Commercial Mortgage-Backed Securities]

For instance, one can be bullish European, Asian, Developed, or Emerging Markets REITs or others and express that view via one or more of these ETFs. From a performance standpoint year to date, TAO has fared the best, up 26.64% with IFAS returning 23.06%, VNQI 17.44%, DRW 17.10%, IFGL 16.87% and so on.

In comparison to U.S. listed REITs, we can see clear out-performance year to date, with RWX and RWO for instance up 15.75% and 9.89% respectively versus a prominent U.S. based REIT fund, iShares DJ Real Estate (NYSEArca: IYR) , up only 6.46%.

This gap in performance also exists thus far in 2012 for Developed Markets ex-U.S. as well as Emerging Markets versus U.S. equity benchmarks, and based on relative under-performance over longer periods of time, such as the trailing one year period and going back a bit further, it seems very possible that the current out-performance may persist for some time.

Guggenheim China Real Estate

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