The COVID-19 pandemic has ravaged many sectors of the United States and global economy. Real estate has been impacted in several ways. Commercial real estate faces risk due to the massive losses from brick-and-mortar retailers and those in the hospitality space.
Moreover, residential real estate activity has ground to a halt across much of the country with many citizens confined and open houses on hold.
Homes sales were predictably soft in the month of March. However, prices in the U.S. and Canada have so far avoided a sharp drop. States are moving to reopen in the coming weeks, which means we may see a return to normalcy by the summer.
The Vanguard Real Estate ETF (NYSE:VNQ) offers investors exposure to real estate. It invests in stocks issued by REITs. The ETF is a good option for investors who are on the hunt for high income. Shares of the ETF climbed 28% in 2019 but have dropped 18% so far in 2020. This is a prime candidate for a rebound in the second half of the year.
At the end of March, the Vanguard Real Estate II Index Fund was the top holding in the fund. It was rounded out by American Tower, Crown Castle International, and Prologis.
This ETF also boasts a solid 4.1% dividend yield. The ETF is currently trading in the middle of its 52-week range. It is still worth picking up in the middle of May.