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October 05, 2010 at 11:53 AM
While it’s true that gold is topping $1,340 an ounce and housing sales remain weak, some real-estate funds are outperforming their metal-based rivals.
REITs outperformed the broader U.S. equity markets by a five-to-one ratio in the first three quarters of 2010, according to the National Association of Real Estate Investment Trusts on Monday.
The FTSE NAREIT Equity REIT Index delivered a 19.10% total return and the FTSE NAREIT All REITs Index delivered an 18.5% total return for the period, compared to 3.89% for the S&P 500.
This means the sector’s news is as good as gold: The iShares Dow Jones U.S. Real Estate ETF (IYR) is matching gold’s returns for the year through Monday of 19.9%, and that puts its returns about 16.5% ahead of the S&P 500’s performance.
Plus, the iShares FTSE NAREIT Residential Plus Capped Index (REZ) outperformed the SPDR Gold Shares ETF (GLD) for the year to date as of Monday. REZ is up 25% year to date.
And the iShares Cohen & Steers Realty Majors Index ETF (ICF) is posting returns topping those of GLD – 22% for the year through Monday, says Morningstar.
