Checking In: REIT Style

Real estate investment trusts (REITs) have come back from the brink they flirted with during the financial crisis to once again be a preferred destination for income investors. ETF issuers have been there to meet renewed investor interest in REITs with the addition of several REIT-specific ETFs in the past year.

One of these rookie REIT ETFs is the PowerShares KBW Premium Yield Equity REIT ETF KBWY, which made its debut in December. As is often the case with new ETFs, some make their debuts to wide acclaim while others fly under the radar. KBWY definitely fits in the latter category, though that isn't a knock.

KBWY will typically hold 24 to 40 small-cap and mid-cap REITs (it held 30 stocks as of Monday), so you're not likely to find some of the large-cap REITs you may already be familiar with in this ETF.

KBWY is well-balanced as Medical Properties Trust MPW and CommonWealth REIT CWH are the fund's top two holdings, but each get weights of less than 5%.

There are some positives with KBWY, not the least of which is that it is a monthly dividend payer, which is nice for investors that want a more regular income stream. With a yield of 4.96%, the KBWY compares favorably or is superior on the basis of yield to more popular REIT ETFs.

Any criticism of KBWY would revolve around points that are not uncommon for ETFs that are this new. Liquidity is poor at about 4,700 shares a day and the ETF has only attracted $3.8 million in assets under management, but the yield should be enough to at least get an investor interested.

Given the market's glum performance recently, KBWY now has an ugly chart, so smart investors can probably pick this ETF up at a better price in a week or two and that could prove to be a wise move.