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International Stock location; Real Estate
altruistguy
01-10-2007, 8:55 AM | Post #2314270
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#9:
I have a substantial sum invested in the I Fund. Is there a particular reason why you would not use this fund?
All else being equal, you are better off holding foreign stocks in taxable accounts, so that you can take the foreign tax credit. Otherwise, the money that you would otherwise get back via the foreign tax credit is just lost- effectively unnecessarily increasing the cost of the investment.
For more info on international investing, see the "Foreign Investing" section here.
#10:
I'm not sure Mr. Haas is familiar with the product.
The TIAA Real Estate account is NOT a REIT. It's not expensive for what it is. (ER of .60%) It's directly owned real estate (for the most part).
TIAA-CREF Real Estate Securities (TRRSX; ER of .80%) is a REIT fund. That's expensive compared to VNQ; but I don't think that's what is being asking about.
REITs are just a fancy name for a market-priced holding company that owns and operates Real Estate. Yes, the TIAA Real Estate sub-account is a bit different, but not very. According to the web site, The TIAA Real Estate Account seeks favorable long-term returns primarily through rental income and appreciation of real estate investments owned by the account. Sounds like a REIT to me, only it isn't traded on the stock market like true REITs are. I feel that comparing this thing to REITs is quite fair. So directly comparing expense ratios with REIT funds seems appropriate. The expense ratio of 0.63% seems unjustifiable, compared with the 0.12% of VNQ for what ultimately is an essentially similar (though much more diversified) investment.
For more info on the major contenders among REIT investments, see here.
I hope this helps,
Eric E. Haas
Originally posted in thread: 56167
Topics
international diversification
tax efficiency
taxable account
the stock market
TIAA Real Estate
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