Happy Thanksgiving! Save 50% on Your MarketBeat All Access Subscription.
  •  days
  •  Hours
  •  Minutes
  •  Seconds
QQQ   282.71 (-1.47%)
AAPL   144.22 (-2.63%)
MSFT   241.76 (-2.32%)
META   108.78 (-2.36%)
GOOGL   96.05 (-1.45%)
AMZN   93.95 (+0.58%)
TSLA   182.92 (+0.03%)
NVDA   158.27 (-2.72%)
NIO   10.12 (-0.49%)
BABA   75.88 (+0.50%)
AMD   73.19 (-2.60%)
T   18.82 (-1.57%)
MU   55.75 (-4.55%)
CGC   3.40 (-7.10%)
F   13.73 (-2.49%)
GE   85.47 (-3.03%)
DIS   95.69 (-3.22%)
AMC   7.33 (-2.40%)
PYPL   79.93 (-0.19%)
PFE   49.57 (+0.73%)
NFLX   281.17 (-1.53%)
QQQ   282.71 (-1.47%)
AAPL   144.22 (-2.63%)
MSFT   241.76 (-2.32%)
META   108.78 (-2.36%)
GOOGL   96.05 (-1.45%)
AMZN   93.95 (+0.58%)
TSLA   182.92 (+0.03%)
NVDA   158.27 (-2.72%)
NIO   10.12 (-0.49%)
BABA   75.88 (+0.50%)
AMD   73.19 (-2.60%)
T   18.82 (-1.57%)
MU   55.75 (-4.55%)
CGC   3.40 (-7.10%)
F   13.73 (-2.49%)
GE   85.47 (-3.03%)
DIS   95.69 (-3.22%)
AMC   7.33 (-2.40%)
PYPL   79.93 (-0.19%)
PFE   49.57 (+0.73%)
NFLX   281.17 (-1.53%)
QQQ   282.71 (-1.47%)
AAPL   144.22 (-2.63%)
MSFT   241.76 (-2.32%)
META   108.78 (-2.36%)
GOOGL   96.05 (-1.45%)
AMZN   93.95 (+0.58%)
TSLA   182.92 (+0.03%)
NVDA   158.27 (-2.72%)
NIO   10.12 (-0.49%)
BABA   75.88 (+0.50%)
AMD   73.19 (-2.60%)
T   18.82 (-1.57%)
MU   55.75 (-4.55%)
CGC   3.40 (-7.10%)
F   13.73 (-2.49%)
GE   85.47 (-3.03%)
DIS   95.69 (-3.22%)
AMC   7.33 (-2.40%)
PYPL   79.93 (-0.19%)
PFE   49.57 (+0.73%)
NFLX   281.17 (-1.53%)
QQQ   282.71 (-1.47%)
AAPL   144.22 (-2.63%)
MSFT   241.76 (-2.32%)
META   108.78 (-2.36%)
GOOGL   96.05 (-1.45%)
AMZN   93.95 (+0.58%)
TSLA   182.92 (+0.03%)
NVDA   158.27 (-2.72%)
NIO   10.12 (-0.49%)
BABA   75.88 (+0.50%)
AMD   73.19 (-2.60%)
T   18.82 (-1.57%)
MU   55.75 (-4.55%)
CGC   3.40 (-7.10%)
F   13.73 (-2.49%)
GE   85.47 (-3.03%)
DIS   95.69 (-3.22%)
AMC   7.33 (-2.40%)
PYPL   79.93 (-0.19%)
PFE   49.57 (+0.73%)
NFLX   281.17 (-1.53%)

Real Estate Investment Trusts (REITS)

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Similar to mutual funds, REITs pool capital of multiple investors to purchase investment properties, mortgages, and other real estate assets. This page lists the 100 largest United States REITs by market cap. What is a REIT?

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
Available with a MarketBeat All Access Subscription
MarketRank™Upgrade to All Access to use the All Ranks Filter
Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
Available with a MarketBeat All Access Subscription
Media SentimentUpgrade to All Access to use the All Sentiments Filter
Analyst consensus is the average investment recommendation among Wall Street research analysts.
Available with a MarketBeat All Access Subscription
Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeDividend YieldAnnual PayoutIndicator(s)
Prologis, Inc. stock logo
20.68$102.89 billion3.91 million3.91 million2.84%$3.16
American Tower Co. stock logo
American Tower
33.95$99.59 billion1.37 million1.96 million2.75%$5.88Short Interest ↓
Equinix, Inc. stock logo
86.62$61.32 billion595,640474,8131.87%$12.40Short Interest ↑
Crown Castle Inc. stock logo
Crown Castle
36.97$59.55 billion2.46 million1.88 million4.28%$5.88Short Interest ↓
Public Storage stock logo
Public Storage
11.73$50.68 billion993,039762,8182.77%$8.00
Realty Income Co. stock logo
Realty Income
57.70$38.72 billion7.73 million3.91 million4.83%$2.98
Simon Property Group, Inc. stock logo
Simon Property Group
19.33$37.85 billion1.73 million2.07 million6.05%$7.00
VICI Properties Inc. stock logo
VICI Properties
31.07$32.01 billion5.73 million9.55 million4.69%$1.56Short Interest ↑
SBA Communications Co. stock logo
SBA Communications
79.05$31.66 billion605,738690,2080.97%$2.84
Welltower Inc. stock logo
144.87$31.49 billion3.26 million2.47 million3.66%$2.44Short Interest ↓
Digital Realty Trust, Inc. stock logo
Digital Realty Trust
22.07$30.90 billion1.77 million1.73 million4.54%$4.88Short Interest ↓
Alexandria Real Estate Equities, Inc. stock logo
Alexandria Real Estate Equities
45.29$24.45 billion742,732989,9173.17%$4.72
AvalonBay Communities, Inc. stock logo
AvalonBay Communities
19.12$23.51 billion1.79 million763,4303.78%$6.36High Trading Volume
Equity Residential stock logo
Equity Residential
20.46$23.50 billion1.80 million1.72 million4.02%$2.50
Weyerhaeuser stock logo
10.20$22.97 billion2.70 million4.24 million2.31%$0.72
Extra Space Storage Inc. stock logo
Extra Space Storage
22.14$20.43 billion1.50 million759,9193.93%$6.00Dividend Announcement
Mid-America Apartment Communities, Inc. stock logo
Mid-America Apartment Communities
29.18$18.26 billion605,929676,0393.16%$5.00
Ventas, Inc. stock logo
N/A$17.66 billion2.27 million2.18 million4.07%$1.80
Sun Communities, Inc. stock logo
Sun Communities
68.30$17.35 billion935,219683,0192.51%$3.52Analyst Report
W. P. Carey Inc. stock logo
W. P. Carey
30.85$16.17 billion924,7861.00 million5.45%$4.24
Iron Mountain Incorporated stock logo
Iron Mountain
31.52$15.49 billion1.16 million1.83 million4.64%$2.47Short Interest ↓
Kimco Realty Corp stock logo
Kimco Realty
59.65$13.65 billion2.25 million4.74 million3.99%$0.88Short Interest ↑
Essex Property Trust, Inc. stock logo
Essex Property Trust
38.13$13.63 billion581,956427,8634.18%$8.80Short Interest ↓
Healthpeak Properties, Inc. stock logo
Healthpeak Properties
25.85$13.34 billion2.85 million4.15 million4.83%$1.20
Gaming and Leisure Properties, Inc. stock logo
Gaming and Leisure Properties
20.89$13.02 billion1.45 million1.55 million5.53%$2.82Dividend Announcement
Short Interest ↑
Host Hotels & Resorts, Inc. stock logo
Host Hotels & Resorts
16.11$13.01 billion5.62 million8.36 million2.64%$0.48
UDR, Inc. stock logo
81.47$13.00 billion2.96 million2.02 million3.81%$1.52Insider Selling
Camden Property Trust stock logo
Camden Property Trust
15.18$12.27 billion1.07 million980,0873.26%$3.76Short Interest ↑
Positive News
Equity LifeStyle Properties, Inc. stock logo
Equity LifeStyle Properties
42.53$11.87 billion691,287949,2542.57%$1.64
American Homes 4 Rent stock logo
American Homes 4 Rent
52.70$11.18 billion1.65 million2.55 million2.28%$0.72Short Interest ↑
Regency Centers Co. stock logo
Regency Centers
24.29$11.01 billion569,052952,7063.88%$2.50Short Interest ↑
Boston Properties, Inc. stock logo
Boston Properties
12.00$10.91 billion2.39 million1.15 million5.63%$3.92Analyst Revision
High Trading Volume
Lamar Advertising stock logo
Lamar Advertising
20.28$10.06 billion552,353512,1044.85%$4.80News Coverage
Sino Land Company Limited stock logo
Sino Land
N/A$10.03 billion1,5382,1867.69%$0.50News Coverage
Annaly Capital Management, Inc. stock logo
Annaly Capital Management
2.62$9.85 billion5.89 million8.17 million16.72%$3.52
Rexford Industrial Realty, Inc. stock logo
Rexford Industrial Realty
57.29$9.78 billion1.05 million1.35 million2.36%$1.26Short Interest ↑
STORE Capital Co. stock logo
STORE Capital
27.39$8.98 billion2.50 million3.51 million5.16%$1.64
Federal Realty Investment Trust stock logo
Federal Realty Investment Trust
22.86$8.74 billion289,857569,4514.01%$4.32Analyst Upgrade
Positive News
CubeSmart stock logo
34.13$8.74 billion1.58 million1.50 million4.42%$1.72Short Interest ↑
Life Storage, Inc. stock logo
Life Storage
25.45$8.72 billion988,751570,0004.21%$4.32
National Retail Properties, Inc. stock logo
National Retail Properties
25.57$8.00 billion1.18 million1.05 million4.92%$2.20
Americold Realty Trust, Inc. stock logo
Americold Realty Trust
N/A$7.76 billion1.08 million1.87 million3.05%$0.88Short Interest ↓
News Coverage
Positive News
Medical Properties Trust, Inc. stock logo
Medical Properties Trust
6.08$7.56 billion11.02 million8.47 million9.18%$1.16
Healthcare Realty Trust Incorporated stock logo
Healthcare Realty Trust
71.74$7.37 billion2.29 million4.44 million6.40%$1.24Short Interest ↓
Omega Healthcare Investors, Inc. stock logo
Omega Healthcare Investors
17.02$6.94 billion2.22 million2.46 million9.05%$2.68Short Interest ↑
Positive News
Brixmor Property Group Inc. stock logo
Brixmor Property Group
20.93$6.78 billion1.20 million2.37 million4.25%$0.96Short Interest ↓
EastGroup Properties, Inc. stock logo
EastGroup Properties
28.72$6.57 billion171,543293,0593.32%$5.00Short Interest ↓
Starwood Property Trust, Inc. stock logo
Starwood Property Trust
8.10$6.54 billion1.44 million2.41 million9.09%$1.92Short Interest ↓
Klépierre SA stock logo
N/A$6.52 billion1,0002,906N/AN/A
First Industrial Realty Trust, Inc. stock logo
First Industrial Realty Trust
16.43$6.43 billion1.39 million1.04 million2.43%$1.18Positive News
Agree Realty Co. stock logo
Agree Realty
37.39$6.06 billion906,957724,6144.21%$2.88
STAG Industrial, Inc. stock logo
STAG Industrial
23.59$5.62 billion1.32 million1.29 million4.65%$1.46Short Interest ↓
News Coverage
AGNC Investment Corp. stock logo
AGNC Investment
N/A$5.58 billion10.58 million12.03 million14.75%$1.44Positive News
Apartment Income REIT Corp. stock logo
Apartment Income REIT
6.08$5.50 billion625,676817,3564.91%$1.80Short Interest ↑
Rayonier Inc. stock logo
62.25$5.10 billion421,706576,0443.27%$1.14Short Interest ↑
New Residential Investment Corp. stock logo
New Residential Investment
4.82$5.08 billion5.09 million5.86 million9.18%$1.00
Ryman Hospitality Properties, Inc. stock logo
Ryman Hospitality Properties
77.48$4.87 billion273,567373,6340.45%$0.40
Kilroy Realty Co. stock logo
Kilroy Realty
21.31$4.81 billion631,343879,0175.25%$2.16Short Interest ↓
Kite Realty Group Trust stock logo
Kite Realty Group Trust
N/A$4.77 billion1.54 million1.44 million4.05%$0.88
Vornado Realty Trust stock logo
Vornado Realty Trust
49.54$4.75 billion3.93 million2.07 million8.56%$2.12
Blackstone Mortgage Trust, Inc. stock logo
Blackstone Mortgage Trust
10.00$4.22 billion942,3071.63 million10.04%$2.48Short Interest ↑
Rithm Capital Corp. stock logo
Rithm Capital
4.52$4.18 billion2.92 million5.41 million11.34%$1.00
Granite Real Estate Inc. Staple stock logo
Granite Real Estate Inc. Staple
8.02$3.86 billion1,4752,9383.64%$2.20Dividend Increase
Positive News
Independence Realty Trust, Inc. stock logo
Independence Realty Trust
28.21$3.86 billion1.34 million3.28 million3.25%$0.56Short Interest ↓
Positive News
Cousins Properties Incorporated stock logo
Cousins Properties
12.25$3.84 billion1.06 million962,7645.05%$1.28
Apple Hospitality REIT, Inc. stock logo
Apple Hospitality REIT
23.91$3.77 billion1.36 million1.83 million5.82%$0.96Short Interest ↓
Positive News
PotlatchDeltic Co. stock logo
8.80$3.76 billion326,561493,8603.78%$1.76
Phillips Edison & Company, Inc. stock logo
Phillips Edison & Company, Inc.
125.32$3.67 billion512,3751.24 million3.57%$1.12
The Howard Hughes Co. stock logo
Howard Hughes
14.72$3.48 billion440,857294,953N/AN/AShort Interest ↓
National Storage Affiliates Trust stock logo
National Storage Affiliates Trust
40.07$3.42 billion574,163769,0285.84%$2.20Analyst Upgrade
Positive News
Essential Properties Realty Trust, Inc. stock logo
Essential Properties Realty Trust
23.08$3.22 billion706,343880,6214.77%$1.08Short Interest ↓
News Coverage
Physicians Realty Trust stock logo
Physicians Realty Trust
26.25$3.18 billion1.95 million2.10 million6.61%$0.92
Corporate Office Properties Trust stock logo
Corporate Office Properties Trust
22.63$3.05 billion461,813744,1974.05%$1.10Positive News
Highwoods Properties, Inc. stock logo
Highwoods Properties
11.98$3.03 billion625,032846,3406.95%$2.00Short Interest ↓
EPR Properties stock logo
EPR Properties
19.65$3.02 billion443,432561,3038.19%$3.30Short Interest ↓
Outfront Media Inc. stock logo
Outfront Media
20.42$2.95 billion790,4021.81 million6.68%$1.20
Douglas Emmett, Inc. stock logo
Douglas Emmett
31.94$2.92 billion1.52 million1.40 million6.74%$1.12Short Interest ↑
Broadstone Net Lease, Inc. stock logo
Broadstone Net Lease
23.42$2.88 billion862,172779,4356.49%$1.08
Equity Commonwealth stock logo
Equity Commonwealth
437.50$2.87 billion580,996793,815N/AN/AShort Interest ↓
Sabra Health Care REIT, Inc. stock logo
Sabra Health Care REIT
N/A$2.86 billion3.08 million2.32 million9.70%$1.20Positive News
LXP Industrial Trust stock logo
LXP Industrial Trust
8.77$2.78 billion3.25 million2.29 million4.76%$0.48
SITE Centers Corp. stock logo
SITE Centers
14.74$2.76 billion1.31 million1.96 million4.01%$0.52
Hannon Armstrong Sustainable Infrastructure Capital, Inc. stock logo
Hannon Armstrong Sustainable Infrastructure Capital
21.74$2.69 billion640,355873,1634.96%$1.50
The Macerich Company stock logo
N/A$2.66 billion2.37 million2.83 million5.49%$0.68
SL Green Realty Corp. stock logo
SL Green Realty
N/A$2.62 billion792,208972,7869.16%$3.73
Arbor Realty Trust, Inc. stock logo
Arbor Realty Trust
7.76$2.50 billion1.41 million2.25 million10.97%$1.60Short Interest ↓
National Health Investors, Inc. stock logo
National Health Investors
33.95$2.31 billion228,570278,6076.75%$3.60
DigitalBridge Group, Inc. stock logo
DigitalBridge Group
N/A$2.30 billion1.08 million1.51 million0.28%$0.04Short Interest ↓
JBG SMITH Properties stock logo
JBG SMITH Properties
49.15$2.24 billion2.98 million1.06 million4.58%$0.90Short Interest ↓
High Trading Volume
Four Corners Property Trust, Inc. stock logo
Four Corners Property Trust
21.63$2.23 billion759,597483,6865.00%$1.33Short Interest ↑
Pebblebrook Hotel Trust stock logo
Pebblebrook Hotel Trust
N/A$2.10 billion1.47 million1.70 million0.25%$0.04
Tanger Factory Outlet Centers, Inc. stock logo
Tanger Factory Outlet Centers
26.90$2.02 billion698,159908,7584.54%$0.88
RLJ Lodging Trust stock logo
RLJ Lodging Trust
N/A$1.90 billion1.66 million1.63 million1.71%$0.20
DiamondRock Hospitality stock logo
DiamondRock Hospitality
24.95$1.89 billion1.30 million2.08 million1.34%$0.12
CareTrust REIT, Inc. stock logo
CareTrust REIT
N/A$1.82 billion1.13 million689,6625.87%$1.10News Coverage
Retail Opportunity Investments Corp. stock logo
Retail Opportunity Investments
36.43$1.81 billion916,9441.07 million4.12%$0.60Short Interest ↓
Uniti Group Inc. stock logo
Uniti Group
N/A$1.71 billion1.09 million1.68 million8.30%$0.60Positive News
American Assets Trust, Inc. stock logo
American Assets Trust
39.47$1.70 billion470,005276,1614.57%$1.28Short Interest ↓
Positive News
Apollo Commercial Real Estate Finance, Inc. stock logo
Apollo Commercial Real Estate Finance
6.38$1.69 billion609,2701.20 million11.67%$1.40
Elme Communities stock logo
Elme Communities
N/A$1.68 billion318,928515,6053.55%$0.68News Coverage
Do Real Estate Investment Trusts Deserve a Place in Your Portfolio?

REITs have many attractive features, but they’re not for every investor

A Real Estate Investment Trust (or REIT) is made up of a number of real estate companies that own a portfolio of income-producing real estate assets. Investing in a REIT allows these investors to earn a share of the income that these assets produce.

For a company to be considered a REIT, it must meet many specific requirements. These requirements, which were established by Congress when they created the concept of a REIT in 1960, help ensure that investors can maximize the income generating aspect of a REIT.

In this article, we’ll look at REIT ETFs as an investment decision. For those investors who are unfamiliar with what REITs are, we’ll define what a REIT is as well as look at give a basic overview of what an ETF is. As the article goes on, we’ll put the two together to show why a REIT ETF can give investors the advantages of investing in real estate with less risk.

In 1960, Congress established a financial product that would allow individual investors to invest in real estate without having to buy or finance property. Real estate investment trusts are divided into two categories: equity REITs and mortgage REITs.

  • Equity REITs – These companies invest in a variety of commercial properties such as offices, shopping malls, apartments, and hotels. The primary income source for these REITs comes through the income they receive from rent. Equity REITs currently make up the majority of the REIT market with more than $2 trillion of assets under management. Avalon Bay Communities (NYSE: AVB) is an example of an equity REIT.
  • Mortgage REITs – In contrast to equity REITs, these companies are composed of more residential than commercial properties and most of their income is derived from mortgages and mortgage-backed securities. Mortgage REITs (or mREITs) profit from the spread between the interest rates they earn from their mortgage loans and the rates they are changed for their short-term borrowing. For example, let’s look at a mortgage REIT that purchases a 15-year mortgage that pays them 3% interest per year. If their short-term borrowing cost is 2% per year, than they will have a difference, or spread of 1% that represents their profit. New York Mortgage Trust (NASDAQ: NYMT) is an example of a mortgage REIT.

REITs can be publicly listed and publicly traded in the stock market, publicly listed (but not publicly traded), or privately listed. REITs must follow specific rules that make them an attractive investment. To begin with, REITs are modeled after mutual funds in the sense that every REIT contains a “basket” of properties. The Internal Revenue Service (IRS) treats a REIT like a corporation. Shares in a REIT must be widely held by shareholders and the REIT itself must primarily own or finance real estate. In addition, their real estate holding must have a long-term investment outlook.

Some additional rules that govern REITs include:

  • At least 75% of their income must be earned from real estate as rent, interest, or the sale of real estate assets.
  • At least 75% of their assets must be in real estate.
  • At least 95% of their income must be passive.
  • At least 90% of their taxable income must be distributed to shareholders as dividends (a REIT has no retained earnings). All dividends are taxed at ordinary rates.
  • Dividend income – Because of the rules that govern REITs, investors are assured of a dividend payout that is higher in proportion to other stocks. Financial advisors will often recommend a REIT to their income-oriented clients because the dividend yields have historically been higher then stocks on the S&P 500 index.
  • Diversification – REITs have a historically low correlation with other asset classes like stocks and bonds. This means that when stocks and bonds are undergoing a correction, REITs generally may do well. However, to maximize the benefits of diversification, investors should look to invest in a variety of REITs so as to get diversification not only between asset classes but also within an asset class.
  • Inflation Hedging – Equity REITs, in particular, have demonstrated an ability to generate increased revenue – from rent for example – even during periods when inflation is on the rise. This means that investors who are looking for an income that will provide reliable income that can help sustain a longer retirement timeline.
  • Total Return Performance – In addition to issuing regular dividends, REITs have a proven history of long-term capital appreciation. In fact over the past half century, REITs have outperformed the broader stock market as well as other assets.
  • Liquidity and Transparency – Because they trade on stock exchanges, REITs offer the same liquidity as other stocks. And because those that are publicly traded are registered and regulated by the SEC, investors are assured that the companies are subject to the SEC standards for corporate governance, financial reporting and information disclosure.

A real estate investment trust (REIT) is an attractive option for investors who want to get the benefits of investing in real estate without owning property. However, just like the housing market, a REIT can be subject to the volatility of the stock market.

And by combining the popularity of exchange-traded funds (ETFs) with an investment in REIT stocks, investors can get the benefits of REIT stocks with much lower risk. With a REIT ETF, investors can own a diverse group of properties inside of a fund that is traded in the same way that they would buy and sell shares on a stock exchange. REIT ETF investors also benefit from the high dividend yields that REIT ETFs generate.

Like any ETF investors should pay close attention to the ETF’s prospectus for information regarding who manages the fund, the fees and expenses associated with the fund, whether the fund is actively or passively managed, and the overall investment philosophy of the fund before deciding whether to invest. A REIT ETF carries the same risks, although perhaps moderated, as other real estate investments. The most notable threat to the profitability of an ETF is rising interest rates.

An exchange-traded fund (ETF) is one of many financial products that serve as a vehicle for investing in REITs. In contrast to a mutual fund which reconciles share price once a day based on the fund’s closing price, shares of an ETF trade like common stock on an exchange, meaning the market price will go up or down throughout a trading session as shares are bought and sold.

An ETF generally trades with a higher daily volume than a mutual fund and has lower fees and expenses which can make them more attractive for investors. Like a publicly traded company that sells shares on a stock exchange, a company that manages an ETF is required to disclose information about the fund to the public.

A REIT ETF is an exchange-traded fund that is exclusive to REIT stocks. As an investor, REIT funds are an ideal vehicle to use a low-cost investment vehicle to gain exposure to a diverse range of properties. As with any investment, investors should take care to perform their due diligence before deciding to invest money in a REIT ETF.

  • Know who manages the ETF – in many cases, REIT ETFs are issued by well-known investment firms that have earned the trust of investors. However, as ETFs have become increasingly popular, there are more companies that are ETFs being created. Just because a company is not well-known does not make it a bad investment, it just means that investors may have to perform more research before making an investment.
  • Know the fee structure – Although most ETFs charge lower fees and expenses than a mutual fund there are exceptions. The best way to compare the fees and expenses of an ETF is similar how you would compare any asset class. Look at the prospectus of the REIT you are considering along with the prospectus of REIT ETFs that share a similar portfolio of assets.
  • Know your risk tolerance – REIT ETFs help manage the risk that can come from owning real estate. They cannot, however, eliminate all risk. As should be expected, REIT ETFs are subject to the same market forces that affect the real estate market. They are extremely sensitive to interest rates as well as employment rates.

There are currently more than 200 REIT ETFs for investors to choose from. REIT ETFs are beginning to figure prominently in the 401(k) plans. However, like other investment vehicles, not all ETFs are the same. To have success, investors should understand what the investment philosophy of the ETF is and match that to their personal risk tolerance.

Like any mutual fund, portfolio managers can get very niche driven which can add more risk to the ETF than investors are comfortable with. You should also be sure to know if the fund is actively managed or passively managed.

In an actively managed ETF, a portfolio manager selects the REIT stocks that make up the fund and will actively buy and sell stocks to generate a higher total return. In a passively managed fund, the portfolio manager seeks stocks that track an index. The Financial Times Stock Exchange (FTSE) Nareit Index tracks the performance of the U.S. REIT industry and the Global REIT market.

Finally, investors should look for diversification. This means looking at U.S. REIT ETFs as well as the global REIT ETF market.

One of the most important strategies for investment success is the ability to profit in any market condition. Investors have long understood the value of real estate as an investment vehicle. However, property ownership was, and in some cases still is, a barrier of entry for all but institutional investors.

That was one of the reasons Congress established the concept of a real estate investment trust (REIT) that would give individual investors an opportunity to invest in real estate without owning residential or commercial real estate. Just like the housing market, a REIT can be subject to the volatility of the stock market. However, REITs have several rules in place that make them an attractive investment option. When you combine those rules with the benefits of an exchange-traded fund (ETF), REITs can be an attractive alternative for income-oriented investors in any market.

For income investors, a REIT EFT can help produce regular and predictable income even in times of low interest rates. A REIT ETF provides the ability for investors to gain exposure to and profit in the real estate market without owning property. Owning shares of a REIT ETF is similar to buying shares of a REIT stock with the exception that investors have more diversification because they are purchasing a basket of companies rather than tying their investment to a specific REIT stock.

One of the most important benefits of a REIT ETF is regular dividend distributions along with some capital appreciation that can lead to a total return that, while not as high as if the investor-owned the underlying properties comes with significantly lower risk. Like the real estate market in general, REIT ETFs can be sensitive to fluctuations in interest rates.

More Stock Ideas from MarketBeat