If you’re looking for a good dividend and don’t want to take on a lot of risk, real estate investment trusts (REITs) can provide you with a great way to earn some recurring income while minimizing your exposure.
However, when it comes to REITs there are a lot of different options to choose from and there’s not only a range in geography, but also in utility. Some REITs focus on office spaces while others look at industrial locations, and so there are many different variables to consider that can make picking a REIT a very complicated process.
One way to simplify this is by investing in an ETF that can help you to diversify your investment and minimize your risk in the process. The BMO Equal Weight REITS Index ETF (TSX:ZRE) does a great job of doing this. Not only will you earn a great 5% dividend, which is paid out in monthly installments, but you’ll have a diverse set of holdings that will take the guesswork out of determining which REIT to invest in or determining which one most closely aligns with your goals.
The portfolio is very balanced with the largest holding, Pure Industrial Real Estate Trust (TSX:AAR.UN), making up just 6.5% of the total weight. The lowest holding, H&R Real Estate Investment Trust (TSX:HR.UN), meanwhile, still makes up nearly 5% as well, ensuring that the ETF lives up to its ‘equal weight’ promise.
With a management expense ratio of just 0.61%, the ETF will allow you to grow your portfolio without saddling you with excessive fees.