Spotlight: REITs As a Distinct Asset Allocation ( Independent third-party analysis conducted recently has highlighted the importance of including REITs as a distinct asset allocation in various investment portfolios, according to NAREIT Executive Vice President of Research & Investor Outreach Michael Grupe. Grupe points out recent recommendations by, Money magazine and the American Association of Individual Investors (AAII). developed a low-cost, model ETF portfolio. In that portfolio, the Vanguard REIT Index Fund accounts for 5 percent of the total allocation. The August issue of Money magazine listed what it calls a “fully diversified model portfolio.” That model portfolio contains a 10 percent allocation to REITs. AAII also offers a model ETF portfolio. That model includes a 16 percent allocation to the iShares Cohen & Steers Realty Majors Fund and 5 percent allocation to the SPDR Dow Jones International Real Estate Fund, for a total global REIT allocation of 21 percent of the overall portfolio. “These examples serve to illustrate how publicly traded real estate investment, through REITs and listed property companies around the world, has increasingly established itself in the minds of investment professionals and the available investment literature as a distinct asset class,” Grupe says. “An asset class that all investors should include as a source of important diversification as they build portfolios for long-term wealth accumulation and retirement savings.”

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