I'm looking for a long-term investment opportunity for some money I have left in a money market fund until I decide to do something with it. is FREL a decent buy?

Anyone have any thoughts?

Solid way to have real estate exposure with very cheap fees. I like that it tracks the index quite well and pays a decent dividend. It is much smaller than something like VNQ but definitely big enough you don't have liquidity issues. If you are looking for general real estate exposure with a decent dividend I say go for it.
I put it in the "not exciting but glad I have it in my retirement account" category, similar to XLU.

EFR said:

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Solid way to have real estate exposure with very cheap fees. I like that it tracks the index quite well and pays a decent dividend. It is much smaller than something like VNQ but definitely big enough you don't have liquidity issues. If you are looking for general real estate exposure with a decent dividend I say go for it.
I put it in the "not exciting but glad I have it in my retirement account" category, similar to XLU.

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It's literally the exact same companies as XLRE and VNQ, just weighted slightly different. Same basic top 5-10 companies that dominate the fund.

And it's a rate sensitive sector in a regime of rising rates. It is not "safe". Your money far safer in tbills than something charging you to pay you 3.5% at a time when bonds are competitive.

Serious question -

Why would you invest in FREL vs. stronger performing funds like QQQ or VMO as two examples?

Genuinely curious; not criticizing...

fulshearAg96 said:

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Serious question -

Why would you invest in FREL vs. stronger performing funds like QQQ or VMO as two examples?

Genuinely curious; not criticizing...

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this is what I would do

Guessing you meant VOO. The most likely reason to consider FREL would be diversification, depending on what you already own. QQQ is heavy on large growth stocks, especially tech. If you already own VOO or a total market fund, you already have a lot of QQQ's biggest holdings. Buying QQQ gives you more of those same companies. FREL owns real estate companies.

QQQ has had better returns, but that doesn't tell us which will do better from here. If past returns were all that mattered, we'd keep narrowing things down to whichever fund or stock had done best. That doesn't mean you should buy FREL, but I wouldn't rule it out just because QQQ has done better.

If you buy FREL, what type of account would it be in? REIT dividends generally get taxed at ordinary income rates rather than qualified-dividend rates. That often makes FREL a better fit in an IRA or 401(k).

AggieInHouston said:

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Guessing you meant VOO. The most likely reason to consider FREL would be diversification, depending on what you already own. QQQ is heavy on large growth stocks, especially tech. If you already own VOO or a total market fund, you already have a lot of QQQ's biggest holdings. Buying QQQ gives you more of those same companies. FREL owns real estate companies.

QQQ has had better returns, but that doesn't tell us which will do better from here. If past returns were all that mattered, we'd keep narrowing things down to whichever fund or stock had done best. That doesn't mean you should buy FREL, but I wouldn't rule it out just because QQQ has done better.

If you buy FREL, what type of account would it be in? REIT dividends generally get taxed at ordinary income rates rather than qualified-dividend rates. That often makes FREL a better fit in an IRA or 401(k).

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appreciate the feedback

Thanks, everyone. I was thinking about it for diversification's sake, but I may choose otherwise.