BEST REIT ETFs and CEFs (REIT Investing Strategy)

I'm exploring a REIT investing strategy with REIT ETFs and CEFs. I think this will be the best way to invest in REITs for long-term growth and reliable dividends!

00:00 - Intro
0:49 - Background Information
1:38 - My REIT Fund Criteria (REIT ETF Screening)
3:40 - My #1 REIT ETF: VNQI
4:28 - Screening Through REIT CEFs
7:35 - Top 2 REIT CEFs: RQI & RNP
8:55 - Best REIT Investments: VNQI +RQI

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LINKS & RESOURCES

Here are the main sources I used for researching these funds:

The difference between closed-end funds and open-end funds (why CEFs are AWESOME):

Learn about why REITs are so powerful within a Roth IRA:

Get started with investing in these funds on Robinhood or M1 Finance:

Interested in camera stuff? Here's the equipment I use to shoot my videos:

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#REITs, or Real Estate Investment Trusts, are one of my favorite investments. They allow you to invest in real estate at minimal costs - and of course, they offer higher dividend yields than the majority of other stocks on the market.

But, I'm all for diversification, which means I lean towards ETFs and Index Funds over individual stocks. For long term investments, like the REIT allocation in my Roth IRA, I want to make sure that the ETFs I select are going to hold up over the years. So in this video, I'm exploring REIT funds (which includes both ETFs and CEFs) to find the REIT investments that will give me the highest yield and the best chance for capital appreciation.

I'm starting with ETFs, which are the standard fund investment. Using ETFDB.com, which is one of my favorite resources, I'm going to whittle down from 44 REIT ETFs to my number 1 choice. In order to do this, I'm using the following criteria:
• Dividend yield over 5% - Again, I'm primarily investing in REITs for the dividend yield. So, I want to make sure my REIT investment delivers an above average yield as would be expected from the category.
• Positive returns over last 5 years - REITs got absolutely crushed by COVID. This means there are good buying opportunities, but a lot of REITs will also have poor returns when looking at recent price history. I'm looking back at least 5 years to find the funds that have effective methodologies, suggesting that they will keep up with the returns of the market in the future and can ensure me a mostly smooth ride along the way.

With these 2 criteria, we're already down to 6 ETFs. Two of these are mortgage REITs, or mREITs, which I am not interested in (I explain why in the video). So, that leaves us with just 4. And when comparing the number of holdings, dividend yield, expense ratios and long term price performance, VNQI, the Vanguard Global Ex-US REIT Index Fund takes the cake. This is my top pick for a REIT ETF - but it doesn't hold ANY U.S. stocks. Fortunately, CEFs will fix this for us.

CEFs, or closed-end funds, offer several benefits over other types of funds, which I explain in detail in my previous video. At CEFCONNECT.com, we have just 8 funds to look through. Most of them have lackluster performance, leaving us with just 3 worthy candidates.

Of the 3, one of the funds has historically paid out huge returns of capital with each distribution. This is a red flag for me for many reasons - so I'm eliminating this one. The last two funds, RNP and RQI, look pretty similar. So, I'm breaking down the differences between the two to find the best option.

Ultimately, I chose RQI because it has a similar yield, similar performance and similar costs to RNP - but, it's 100% allocated to REITs, whereas RNP is diluted with preferred stocks from other industries. I'm going for a pure REIT investment here, which is why I made this call - but, that's not to say RNP is a bad investment! It may be perfect for investors looking to diversify beyond REITs.

By combining #RQI and #VNQI, I'm estimating an 8.5% annual dividend yield with a 1.5% expense ratio. With over 800 stock holdings between the two, I'm pretty satisfied here!

What do you think? Let me know how you're allocating to REITs within your portfolio!

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DISCLAIMER: NOT FINANCIAL ADVICE.
The content in this video should not be used as the basis for any investment decision, as it is for entertainment purposes only. Additionally, some of the links contained in this description are affiliate links. I may earn a commission via Amazon, M1 Finance or Robinhood should you choose to purchase or sign up at the links provided.

[ValueForInvestors]

💰 Get started investing on M1 Finance w/ a $1, 000 deposit and get a $30 bonus: m1finance.8bxp97.net/tyler

[SneakersDD]

Another great video! Thanks Tyler. Your systematic thinking makes learning easier and more fun! You deserve more subs.

[ThorF]

You do a really awesome job with a lot of great information, even tho I am watching you from Germany it's very useful for me ;)

[TradingWithCJ]

Really am liking reits right now, less talked about and generally good growth & pay nice dividends aswell!

[mirelysgarcia]

Great video! Straight forward and easy to follow. Kudos

[Nemo-ynsp]

Excellent content and delivery, but background noise too much for me. Thank you for info - clarified what CEF are a little more for me.

[sfmediaapps]

Great video and I really enjoyed your REITs in a Roth IRA video. If I can make one comment to maybe consider, since this is an international REIT you will have to pay international taxes (which foreign governments take out), which decreases the yield. International taxes in a taxable brokerage account you can recoup from the US government, if you put them in a Roth which I'm assuming you're going to do you lose that ability since Roth's are tax free.

[Tchild]

I own RQI and AWP both. Both Monthly divi payers.

[TETrading]

With vaccines coming out now I think REITs are a good bet again. As well as the financial sector.

[laughuntilyoucryordie]

My conclusion on RQI as well, great informative video thanks! I will look into adding VNQI as well.

[tboyonga]

Hi Tyler,
Apparently, I just watched this video, very informative. Perhaps, love your screening process. My question is RQI is a leverage etf, not really a fan of Leverage ETF'S, as they re more risky and you could loose. I was surprised when you screened out the sister, RFI, which is a similar stock or pretty much the sane with no leverage. I am actually considering the RFI OVER RQI.

[NiceGuyEddy]

I really liked your analysis and system for choosing REITS, I was disappointed to see that VNQI suspended their dividend. Where is your Roth at with REIT's now? Did you sell your VNQI for RQI? I currently and invested in a mortgage REIT (NLY) which has done well for me. Great video overall! I would love to see you do one for BDCs.

[Lucia-Sosa]

What are your thoughts on VNQ? The US domestic real estate REIT that Vanguard offers

[m.soliman_au]

I liked the video before even start watching, weird :)

[muffemod]

VNQ outperformed VNQI though for 3y and 10y

[dreamlifedividends]

VNQI didn't pay a dividend in 2020