VNQ - 10% Yield From Real Estate Investing: RIET ETF
2024-02-07 07:15:00 ET
Summary
- RIET offers a monthly ~10% dividend yield.
- It also offers upside potential as interest rates return to lower levels.
- I discuss the pros and cons of this high yielding ETF.
In a recent article , I explain that I typically stay away from REIT ETFs because of three main reasons:
- Market cap weighting: Most REIT ETFs are market-cap weighted and as a result, they end up investing most of their capital in large and mega-cap REITs. I don't like that because large REITs are typically priced at much higher valuations than small REITs that are otherwise fairly similar. As you will see in the table below, investors are today paying significantly more for every dollar of cash flow coming from a large REIT and that premium is excessive in my opinion.