(Source: Index Universe)
Just like most other sectors, U.S. real estate investment trusts are taking advantage of a broad rally in stocks. In the past three months, for example, the broad-based Vanguard REIT ETF (NYSEArca: VNQ) has soared more than 28% as investors look for a bottom in the credit meltdown.
Still, VNQ is down more than 13% in 2009. In the past 12 months, it has fallen by more than 40%.
A stark contrast is the rapidly evolving international REIT exchange-traded funds segment. At the end of 2006, the first global fund of its kind launched. The SPDR Dow Jones International Real Estate ETF (NYSEArca: RWX) now has at least 10 global-themed rivals. Some are widely diversified, while others are very regional or country specific in nature.
As a group, they’ve held up through the mortgage meltdown and worldwide recession much better than domestic REITs. RWX has actually gained a bit more than VNQ in the rally that began in March. And it’s up by double digits so far this year.
Towering over the field, though, is the Claymore/AlphaShares China Real Estate ETF (NYSE: TAO). Since the rally’s start it has gained more than 60%. This year, it’s up more than 63%. In large part, how much exposure more diversified regional and global REIT ETFs have to China and closely related markets in Asia is driving short-term results.
Read Murray Coleman’s full article “International REITs: China Vs. World?” in Index Universe (July 1, 2009).