It is difficult competing with the traditional portfolio mainstays of equities and bonds. Investors are familiar with these products and may not have a great knowledge beyond those offerings. But that is not going to stop some firms from trying. One such firm, Advantus
, is making the case for REITs.
Joseph Betlej, vice president at the firm, spoke at the SunStar
investment press briefing held in New York City today. While there, he did acknowledge that some people had difficulty understanding the concept of the REIT. "There is an educational process involved. Investors do not readily comprehend that you are investing in a trust, not in real estate itself."
But Betlej is determined to spread the word and part of his strategy is clearly to attend conferences such as this one to plant story ideas with the more mainstream press.
"REITs are great for diversification," he told the gathering. "We are looking to be the first alternative investment for that stock/bond portfolio."
"REITs provide five to seven percent returns with less volatility than equities," the executive contended.
Betlej sees REITs as being excellent investment vehicles for those in 529 plans and 401(k) plans. "We are making progress in the 401(k) market," he stated. Advantus is also investigating potential opportunities in wrap marketplace.
"Some of our best results are in the intermediate channel," Betlej added. "The financial advisor sees a need for diversification in the client's portfolio and can recommend a REIT, if that is appropriate recommendation. REITs are beginning to grow in stature in the industry, which has certainly been helped by the report from Ibbotson. But there is still a lot of work to be done."
Industry watchers can expect to see Advantus executives continue to press their case -- to brokers, to investors, and to reporters -- on what they perceive to be the advantages of REITs.
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