Petey,
Here's a link to the company that manages the Wilshire REIT ETF (RWR):
http://www.streettracks.com/pages/wilshire.shtml
Here are some links to Indexfunds.com, having to do w/ ETF's:
http://www.indexfunds.com/articleSelect ... skwds=ETFs
http://www.indexfunds.com/data/ETFScreener.php
Bernstein says that the change in the REIT industry (from conservative to more aggressive) has lowered the correlations w/ other asset classes. The industry change may result in more severe boom and bust cylces, or more fat tails (as opposed to normal distributions) in returns.
The dividend yield is simply the dividends divided by the NAV of the fund. So, when REITs are doing well (like recently) the NAV (or price) goes up faster than the dividends paid, and the yield drops. And if we remember that when prices go up, expected returns go down, and when prices go down, expected returns go up, the low historical yield indicates a lower future return, and not a good buying opportunity (by historical standards).
· Caveat: One could have looked the same way at the U.S. stock market (or U.S. large cap stocks) in the early to mid 1990's and come to the same conclusion, but then would have missed out on all those irrational gains in the late 1990's. So, you have to be prepared to be wrong for many years if you forgo an asset class for these reasons.
If REITs really will be lowly (or even slightly negatively correlated) to stocks and such, then I'm not sure their "non-attractiveness" right now makes them totally excludable from a portfolio. I don't think I'd jump in with both feet, but rather DCA or value average my way in. If you are building a truly diversified portfolio, you will always be buying into something that has done well for a while and something that has done terrible for a while. The simple fact is you cannot ever know if they will continue to do bad or well in the future. "Cloudy the future is."
The Cohen & Steers ETF only has about 30 REITs in it, although this may be enough diversification in the REIT sector (I'm not a REIT expert at all, btw). But, I'd rather go with the Wilshire ETF for more diversification in the REIT sector, and less chance of management error.
Again, I would not consider myself that knowledgeable about REITs. These are only my musings from what I've read.
- Alec