Why I Won't Buy REIT ETFs

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REIT ETFs like VNQ stock are heavily invested in large-cap REITs that are more expensive because they are market-cap-weighted. They also invest in property sectors that I prefer to avoid. They invest in externally managed REITs that suffer significant conflicts of interest. They pay a relatively low dividend yield. I think that alpha is attainable in the REIT sector and this is why I avoid VNQ-type ETFs and prefer to selectively invest in individual cheap REITs. I own many of them as part of my dividend portfolio.

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Important Disclaimer: This video is impersonal and does not provide individualized advice or recommendations for any specific person. Viewers/readers should not make any investment decision without conducting their own due diligence and consulting their financial advisor about their specific situation. This video is for entertainment purposes only and you are responsible for your own investment decisions. The information is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The opinions expressed are those of the publisher and are subject to change without notice. This YouTube channel is managed by Leonberg Research OÜ, a subsidiary of Leonberg Capital OÜ.

#reits #dividend #passiveincome

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What do you think about REIT ETFs? What's your favorite?
Thanks for all your support! All your "likes" are making a big difference and I appreciate it.

askjussi

Thanks, Jussi, for an excellent presentation on why REIT ETFs are not a good way to invest in REITs. I agree, and I have been a stock picker, especially of REITs, for the last 20 years. It has been a lot of work but it has been worth it and quite rewarding. Good stuff!

davidwysocki

I'm pretty much an ETF investor with a focus on dividend and growth thereof (SCHD, DGRO, DIVO, JEPQ and JEPI). However, I cannot find any REIT ETFs that I like; none of them have a decent quality screener. Therefore, I hold individual REITs.

hansschotterradler

Aside from diversification benefits, ETFs are for people who don't know how to evaluate a business's fair value and future prospects. Being very good at buying good things at a discount is much more profitable than just dollar-cost-averaging into a bundle of things.

luksdoc

Thanks Jussi. Sharing this with my investment group.

ericfrith

If rate cuts happen in September, then putting a lot of money in REITs will be a great idea. I, like many others right now, have a lot of money in a CD that matures slightly before the feds meet it September. I’m putting all of that in REITs

travissorenson

Thanks for your advice! What do you think of RQI?

troy

we are potentially into a TIME in financial markets where they are once again trending towards 'inefficient' since there is such a HUGE amount of 'passive' capital being thrown into ETFs (which are often already holding majority of assets at all time high prices) simply due to their low fees and ease of use. The nature of most of these ETFs then means the 'fund' has to turn around and keep buying those assets (usually Giant CAP stocks) in whatever sector they are benchmarking which further exasperates the cycle

taterrhead

Excellent video 💪 totally agreed with every point you make… you should apply for a “value oriented reit etf” 👍👍👍 something like “SPGP reit etf” 😁

cesarerodriguezl

These are all good points, Jussi. But let me ask - RNP seems concentrated in a few holdings, and pays a good dividend. You don't like it?

international_dividend

I'm taking a break with REIT investing for a few months. I'm trying to capitalize on the AI/microchip stocks for the 10 year growth opportunity since I missed out on Nvidia.

FredMan_

Hello Jussi! What do you think about my REIT portfolio? From biggest to smallest position: VICI, ABR, O, CCI, WPC, STAG. Will i beat the SP500 on the long run? Thank you!

bodiandras