Alex Pettee, CFA
You Can Do Better Than VNQ
ETFs are an excellent option for investors seeking simple, low-cost, and diversified exposure to real estate, particularly for investors that have limited time to dedicate to active real estate research.
Utilizing a single fund, however, discounts the vast differences of investment characteristics within the real estate sector. There is significantly more variation between REIT sectors than between entire industry groups.
Perhaps due to “career risk,” many financial advisors invest exclusively in one ETF for real estate exposure.
Innovation in the real estate ETF space –notably sector-based ETFs - has enabled investors to customize their portfolios toward their more specific needs, objectives, and existing exposures.
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