REIT ETF: FTSE NAREIT Residential Index Fund (REZ)
If you’re looking for exposure to the multifamily rental housing boom, but want to diversify beyond either single housing stocks or REITs, an ETF like FTSE NAREIT Residential Index Fund (REZ) might be just what you’re looking for.
Like all ETFs, REZ offers the diversification of a mutual fund, with low expenses and the advantages of trading on a major exchange just like a stock. REZ’s top holdings include multifamily REITs like AvalonBay (AVB), Equity Residential (EQR), Essex Property Trust (ESS) as well as Public Storage (PSA) common stock, which also benefits from the rental housing boom.
REZ has a modest 3.5% current dividend yield, but it has gained more than 18% this year. I think REZ is will continue to gain ground as the low-vacancy trends in multifamily housing spur higher rents and stronger profit margins. With those growth prospects and a decent dividend, REZ is a good ETF to buy and hold now.
As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.