High yields from exempt REITs

Article Excerpt

ISHARES CDN REIT SECTOR INDEX FUND $14.04 (Toronto symbol XRE; buy or sell through a broker; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of iShares CDN REIT Sector Index Fund’s value. iShares CDN REIT’s expenses are just 0.55% of its assets. RioCan REIT is the fund’s largest holding, at 25%, followed by H&R REIT (12.7%), Canadian REIT (9.3%), Calloway REIT (8.2%), Boardwalk REIT (7.1%), Primaris Retail REIT (5.6%), Dundee REIT (5.4%), Chartwell Seniors Housing REIT (5.2%), Canadian Apartment Properties REIT (5.1%), Cominar REIT (4.9%), Allied Properties REIT (3.7%), Extendicare REIT (3.7%) and Artis REIT (3.7%). The fund yields 5.3%. Most REITs, including those held by the iShares CDN REIT Sector Index Fund, are exempt from Ottawa’s new income-trust tax, which takes effect on January 1, 2011. That will help keep distributions high. iShares CDN REIT is a buy. buy…