indexfundfan @ indextown

I added international REITs into my portfolio in June 2006. Several articles have mentioned the added diversification benefits of having international REITs as opposed to just having domestic REITs. A recent post on the Diehards forum also discussed this. In addition, it appears that there are certain tax advantages to holding international REITs in a taxable account (due to the foreign-tax credit).

There are not many international real estate funds to choose from, and there is none from Vanguard. The fund I selected was the Alpine International Real Estate equity fund (EGLRX). This fund has about 40% allocation in Europe, 30% in Asia, 28% in North America and 2% in Latin America. The expense ratio of this fund is 1.18%.

Currently, I am targetting this fund to have a 1:3 ratio of my overall REIT allocation, i.e. 1 part of international REIT (ELGRX) to 3 parts of domestic REIT (VGSIX). The new allocation will be reached by re-allocating my VGSIX assets to EGLRX in the next few months.

This entry was posted on Saturday, June 24th, 2006 at 5:29 pm and is filed under Investing, My Portfolio. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.