May 26, 2008
REIT Fund Redux
Mutual funds investing in real estate investment trusts are "clawing their way back after taking a clobbering in the credit crunch last year," The Wall Street Journal reports.The average real estate fund, which lost over 14% on average in 2007, was up almost 5.6% this year through May 12, according to Morningstar. That makes it the second-best-performing U.S. stock fund group this year-impressive considering the S&P 500 slipped 3.7% in the same period.
Keith Pauley, chief investment officer at LaSalle Investment Management, said improvement in the credit markets over the past two and a half months, combined with strong earnings at certain companies and encouraging overall earnings, has energized the sector.
After years of spectacular returns, REIT funds "hit a wall last year as concerns about the residential housing sector and other issues snowballed into a full-blown debt-market crisis," The Journal said.
After pulling $6.4 billion out of real estate funds, excluding exchange-traded funds, in the last three quarters of 2007, investors moved $1.9 billion into them in the first quarter of this year, according to Financial Research Corp.
WisdomTree Income ETF
WisdomTree Investments Inc. said Tuesday that it had introduced an actively managed, exchange-traded fund. The WisdomTree U.S. Current Income Fund is to invest in money market securities and have an expense ratio of 0.25%. Mellon Capital is to sub-advisor. Money market funds typically hold high-quality, short-term debt-such as Treasury bills-and are typically used for capital preservation. The new portfolio seeks current income while preserving capital and maintaining liquidity by investing primarily in short-term instruments.
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