Invesco PowerShares Capital Management’s Active U.S. Real Estate Fund (NYSEArca: PSR) has hit the market, offering the first “active” competition to the major REIT ETFs.
PSR will select from securities in the FTSE NAREIT Equity REITs Index to create a concentrated portfolio of 45–55 REIT stocks. It will also have the discretion to hold a significant portion of its assets in cash, if the managers determine that’s needed. The fund will disclose all trades at the end of each trading day.
There are 12 domestic REIT ETFs, but in reality, four dominate in assets: Vanguard REIT Index ETF (NYSEArca: VNQ); iShares Cohen & Steers Realty Majors (NYSEArca: ICF); iShares Dow Jones U.S. Real Estate Fund (NYSEArca: IYR) and SPDR Dow Jones Wilshire REIT ETF (NYSEArca: RWR).
PSR’s “active” tag not only comes with a more-concentrated holdings list than most of the other REIT funds (ICF holds 31 stocks), but a relatively high expense ratio of 0.80 percent.