ETF Talk

A Hassle-Free Play on the U.S. Real Estate Sector

Real estate investment trusts (REITs) have seen a spike in popularity in 2017.

REITs typically purchase office buildings, hotels and other properties to produce income. The Vanguard REIT ETF (VNQ) is a hassle-free play on the U.S. real estate space with a large, well-known investment group.

REITs offer many attractive advantages versus other types of investment vehicles including:

  1. High yield – The longer-term average for REITs has been trending in the 7-8% range, well above the yield of the S&P 500 index.
  2. Liquidity – REIT shares are bought and sold on a stock exchange, which is a far more efficient and easier market than buying and selling properties directly.
  3. Diversification – REITs offer a good way for investors to spread their risk.

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