Vanguard's VNQ ETF, which invests in REITs, pays distributions taxed as ordinary income, not at favorable dividend rates, causing a high tax burden in taxable accounts. At a 24% tax bracket, a $500,000 VNQ position yields about $14,250 annually, with $3,420 lost to federal taxes each year. Holding VNQ in a Roth IRA avoids this tax, allowing reinvestment of the full amount and potentially saving up to $90,000 over 20 years. Investors should consider placing REIT funds like VNQ in Roth accounts or doing phased Roth conversions to minimize tax costs on non-qualified income.
Chilton REIT Strategy will change its primary benchmark from the MSCI US REIT Index to the Vanguard Real Estate ETF (VNQ) starting June 1, 2026. This shift reflects the evolving REIT landscape and Chilton's broader investable universe, including cell...
REITs have underperformed over the past five years due to challenges like the pandemic, but their long-term returns remain promising. Current low valuations suggest potential for unusually strong future gains. Additionally, AI disruption could increa...
