1.07.2007

Non-Ret: Specialty Real Estate

My Pick: SSgA Tuckerman Active REIT Fund SSREX

These days may be the worst possible time to invest in Real Estate in general as prices have run up tremendously over the last few years. That said- Office Real Estate has still been rising- Boston Properties for example (Stock symbol: BXP) has been doing well- even as residential real estate has struggled.

Etrade's funds screener does not distinguish between funds that focus on commercial vs Residential Real Estate sectors- or a combination, etc. so it will be difficult to focus on a sub-sector using this research tool. This is OK as I do not want to try and chase market trends- I want to pick a good fund I can contribute to over time. Regardless, I picked the order of categories to diversify according to a progression and if I wanted to build a portfolio of 9 funds, Specialty Real Estate would be the category I would pick from next.

The best performing No-Load fund Etrade offers requires an initial $15,000 investment so I am not picking it. It also lists a turnover ratio of 1411%. This goes to show you that some managers can make big profits buying and selling constantly, but I would hate to get the tax bill for profits earned this way!

My pick is SSgA Tuckerman Active REIT Fund SSREX. It has a $1000 minimum initial purchase and lower than average expenses 1.00% and turnover 35%. The average for Real Estate Funds is expenses 1.48% and turnover 81.98%. It does make you wonder why Active is in the title since the turnover is only 35% but what are you gonna do?

4 comments:

Jake said...

dump it!

Wyliemoney said...

No way! I would buy more if I actually owned it. I do not own this one though.

Wyliemoney said...

Down 17% over the last 6 months- that is when I look at whether it is time to buy!

Pete said...

This will be a great find for long term investment. Great dividends, and even though the price is down the dividends keep you even if you continue to invest. Be patient and hold this one for a few more years and it will begin to climb back. Price now is about $8, I see it back up in the 20 or 30's when the market squares itself away.