Although mortgage REIT funds offer bond-like dividend streams, they trade like stocks, creating relatively unique return patterns over time. In his recent interview with Barron’s, Matt Reiner discloses why REIT funds are continuously so attractive to investors and what to be aware when making considerations to invest in one.
“Despite their run, REITs remain attractive to income investors. But we warn our clients that funds using stock REITs are very different animals than those buying mortgages,” says Matt Reiner, chief investment officer at Capital Investment Advisors in Atlanta, which has $1.1 billion under management.
“Compared to Treasuries, mortgage REITs are paying much better yields–and we don’t see that trend reversing soon,” says Mr. Reiner, who pairs small doses of the iShares fund with much larger stakes of the Vanguard ETF to diversify his portfolios’ real estate exposure.
Please follow the link to read more: http://blogs.barrons.com/focusonfunds/2013/03/06/as-mortgage-reit-funds-stay-hot-remember-the-leverage/?mod=google_news_blog