Premium REIT ETFs

Gold, REIT and Bond ETFs are trading at premiums that logically belong in another world.

That’s according to the Wall Street Journal’s Michael Corkery in his column The Fantasy World of REITs and Gold. Corkery writes that REITS are trading at a premium to their underlying assets for the first time since the peak of the commerical real estate boom in 2007.

REIT premiums don’t make sense in a time when office buildings are emptied by rising job losses and the Federal Reserve is warning that the real estate values are likely to plummet in the near future.

REITs seem to be attracting investors in search of higher yields than what they can get from Treasuries.

The largest REIT ETF is the $1.6 billion Cohen & Steers Realty Majors (ICF) . An alternative REIT ETF choice is the $1.2 billion DJ Wilshire REIT ETF (RWR).

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