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4 Real Estate ETFs That Pay 4-8% In Dividends



When it comes to investment choices, the hardest part seems to be choosing which options to actually, well, choose. You’ve got to gauge how much of risk you can take on, and what your investment horizon looks like.

Today, we’ll take a look at an option that allows you to diversify your portfolio while adding a bedrock of stability.

Enter the REITs! (Dramatic sound effects…)

What’s a REIT?!

REITs—aka real estate stocks—are ideal targets for investors who want a steady stream of income. By IRS law, REITs are required to pay out 90% of its earnings in dividends—great for the income investor.

Although there are various REITs (pronounced “reet”), the variety might confuse a regular investor. Here’s where investing in REIT ETFs (exchange-traded funds) can almost save a passive investor.


An ETF is a pooled investment vehicle and offers diversified exposure to investors across asset classes. Investors can buy ETF shares that represent a proportional interest in the pooled assets.

Here are four REIT ETFs with a dividend yield of 4-8%.

1. PowerShares KBW Premium Yield Equity REIT Portfolio [KBWY]

REITs have historically been a high-yielding asset class compared to standard stocks on the Standard & Poor. KBWY capitalize on this by targeting REITs with high dividends, allowing this ETF to pay out a generous 7.2% a year.

Its top holdings include Washington Prime Group [WPG], Government Properties Income Trust [GOV], New Senior Investment Group [SNR], Global Net Lease [GNL] and Whitestone REIT [WSR].

Dividend: 7.2%

Market cap: $252.86 M

Expense ratio: 0.35% ($35 for every $10,000 invested)

2. The Vanguard REIT ETF [VNQ]

VNQ offers wide exposure to property trusts in the United States and covers over 65% of the entire US REIT market value. Due to this insane diversification of stable assets, the dividend is a little lower—but it’s well worth it for the investor who wants to sleep at night.

Top holdings include American Tower [AMT], New York-based Simon Property Group [SPG], Crown Castle International [CCI], Prologis [PLD] and Equinix [EQIX]—a  combined total of close to $250 B in market capwhich altogether accounts for 22.4% of the ETF.

Dividend: 4.2%

Market cap: 33 B

Expense ratio: a ridiculous low 0.12% ($12 for every $10,000 invested)

3. VanEck Vectors Mortgage REIT Income ETF [MORT]

The MORT ETF invests in mortgage REITs. In the case of mortgage REITs, firms borrow capital to invest in MBS (mortgage-backed securities) or mortgages. These REITs make money off the interest rate spread.

The top holdings include Annaly Capital Management [NLY], AGNC Investment [AGNC], Two Harbors Investment [TWO], New Residential Investment [NRZ] and Starwood Property Trust [STWD] that account for 43% of the ETF.

Dividend: 7.8%

Market cap: 15.4 B

Expense ratio: 0.41%

4. The iShares Global REIT ETF [REET]

Again, this one yields on the lower side of the spectrum. This bad boy provides international exposure, which means added diversification. Approximately 40% is allocated to international holdings.

Top holdings include Simon Property Group [SPG], Prologis [PLD], Public Storage [PSA], WFD Unibail Rodamco and Digital Realty Trust [DLR].

Dividend: 4%

Expense ratio: .14%

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