Jon VialouxiShares S&P/TSX Capped REIT Index ETFXRE.TOCOMMENTApr 24, 2015

(Not surprisingly, he's biased to active management ;)  ETFs often get overweighted by the largest constituents. (As when the Mag 7 has an issue, the S&P 500 will go down more than the other 493 names.)

This one is heavily weighted by a handful of names in apartments, office, retail and industrial. But it doesn't include seniors housing.

You're better off finding individual names with resilient and growing cashflows, that are trading at a discount to private market value. If you're unable to buy individual names, this ETF is a great tool. REITs are at a greater value disconnect today than we've ever seen.

It's corrected during rising rates, following a good rally after the April lows. He doesn't expect a long interest rate cycle, and hope the Fed won't raise rates this week. But doesn't like XRE which is heavily weighted in a few stocks, preferring an equal-weight ETF like ZRE.

Be cautious about Canadian real estate market -- uncertainties about economy, real estate, and immigration. Decent yield of 4.87%, but your capital is at risk.

If you want a REIT, look instead to the US for logistics, data centres, storage, and warehouses.

REITs are difficult. If you have a very low cost base and have to pay tax on selling, figure out how you want to work yourself out of it over a couple of years. Growth will be challenging.

For alternatives with real estate exposure, you might want to look at some of the banks or a bank covered call ETF. Take a look at ZEB.

Challenging to own REITs in Canada. The 5-year return is slightly negative, even including dividends. Some names in it make sense, some don't. Cumulative inflation has hurt REI.UN, the second-largest holding. Softness in Canadian economy. 

5- and 10-year yields are moving higher, and REITs are very sensitive to higher rates because of their debt. REITs might make sense in a stronger economy, with rates moving down.

He'd move on. There's a 48% spread between the top and bottom quartile performers. Can't capture the upside with an ETF. Better to focus on the winners, and avoid the losers. CAR, HOM-U, WIR-U, and Granite are great choices. Look for growth, and at a discount is even better.

And REITs outside Canada? Always a good choice if you want broad exposure to Canadian real estate. CAP REIT is the biggest holding, which he really likes, as well as H&R and Riocan REIT (also likes it). However, XRE is concentrated in these names, so you may be better off picking specific names that offer better growth. To answer: Outside Canada, you can look at VNQ and IRR in the U.S. that covers the U.S. REIT market. The US REIT market has more specialized sectors, like towers and data centres.

The run up from $24 was impressive for D.UN-T. He does not own individual real estate -- he holds XRE-T instead. He would like to see it consolidate at these levels for a while before buying.