Top 5 Real Estate Funds To Add Yield And Stability To Your Portfolio

When talking about real estate investment, a lot of what you hear from people is that because they own their own home, they’ve already dipped their investment toe into the pool. But that’s not the type of real estate investment that will give you more diversity in your investment portfolio.

Most real estate portfolios include real estate investment trusts (REITs), which own, develop and manage income-producing properties. You can choose from several categories to invest in, including apartments, hotels, industrial sites and shopping centers.

The big draw for many is that real estate investing typically adds relatively little risk to your portfolio while adding more diversity and potential growth. The advantages are many, including recurring income, tax benefits and the tangible asset of the investment because what you are investing in is a physical property that will benefit from lease activity even if the property value drops. 

Some of the top-ranked real estate investment trust (REIT) index funds to invest in include the following real estate funds: 

TIAA Real Estate Account (QREARX)-Owned Nuveen Short-Term REIT ETF

The Nuveen Short-Term REIT tracks the investment results of the Dow Jones U.S. Select Short-Term REIT Index. Nuveen invests at least 80% of the sum of its net assets and the amount of borrowings for investment purposes in REITs. The index is a subset of the Dow Jones U.S. Select REIT Index, which in most cases includes equity REITs traded on a national securities exchange in the U.S. Those REITs gain at least 75% of their revenue from the ownership and operation of real estate assets with a minimum market capitalization of $200 million at the time of their inclusion. The exchange-traded fund (ETF) is non-diversified.

BlackRock Inc. BLK-owned iShares Core US REIT ETF (USRT)

The iShare Core US REIT ETF tracks the investment results of the Financial Times Stock Exchange Group (FTSE) National Association of Real Estate Investment Trusts (NAREIT) Equity REITs Index composed of U.S. real estate equities. The index measures the performance of U.S.-listed REITs, excluding infrastructure, mortgage and timber REITs. This fund primarily invests 80% of its assets in the component securities of its underlying index and in investments with economic characteristics that are identical to the component securities of its underlying index. 

Real Estate Select Sector SPDR® Fund XLRE 

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The Real Estate Select Sector SPDR® Fund aims to provide investment results that, before expenses, generally correspond to the price and yield performance of publicly traded equity securities of companies in the Real Estate Select Sector Index. Under normal market conditions, the fund invests substantially the vast majority of its total assets in the securities comprising the index. That index includes securities of companies taking part in real estate management and development but not mortgage REITs. The fund is non-diversified.
Charles Schwab Corp. US REIT ETF™ SCHW 

The Schwab US REIT ETF tracks the total return of the Dow Jones Equity All REIT Capped Index, which is composed of U.S. REITs classified as equities. The index excludes mortgage REITs that indirectly lend money to real estate owners/operators by purchasing mortgages or mortgage-backed securities. This qualification includes hybrid REITs that participate both in equity and mortgage investing. The fund’s policy is that under normal circumstances, it will invest at least 90% of its net assets in securities included in the index.

CalTier Multi-Family Portfolio Fund

An alternative real estate investment strategy can be found with CalTier Realty, an equity crowdfunding platform that opens the door to professionally managed institutional grade multi-family investments not typically available to the retail investor. The JOBS Act of 2014 cleared the way for crowd-funded investing and spawned a bevy of tech-enabled real estate platforms. Still, the San Diego-based CalTier significantly differentiated itself from the pack.

CalTier identifies, invests in, and manages multi-family assets on your behalf, with no minimum lock-in period, even if you’re a non-accredited investor. The platform’s Multi-Family Portfolio Fund has a $500 minimum investment and a target annual distribution of 8%. 

Looking for ways to boost your returns? Check out Benzinga's coverage on Alternative Real Estate Investments:

• Exclusive Offering For 3 Large-Scale Real Estate Developments In Markets That Have A Growing Demand For Rental Units
• This REIT You've Probably Never Heard of Has Paid a Dividend Above 8% For The Last 5 Years
• Like Dividends? Then You’ll Love These High-Yield Investments

Or browse current investment options based on your criteria with Benzinga’s Offering Screener.

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Originally Published on July 26, 2022