The new Franklin Fund will invest in a portfolio of commercial Real Estate Investment Trusts (REITs) from around the world. A REIT is in essence a stock that represents ownership of the underlying real estate assets. The share structure makes it easier for investors to buy into properties that they normally could not afford on their own as well as providing liquidity to what has traditionally been an illiquid investment. Currently, major property markets in the United States, Canada, Australia, France, Hong Kong, Japan, Singapore, New Zealand, and South Africa have REIT structures. The United Kingdom and Germany are in the process of adopting this structure.
The vast majority of REITs represent ownership of commercial properties such as large office buildings, apartment complexes, and warehouses. This is often refererred to as the "securitization" of real estate as the underlying properties are represented by an easily tradeable security. Going forward, this securitization process is likely to be expanded to other types of real estate, even individual homes. Don't be surprised that in the very near future instead of investing in a single rental property you may instead invest in a portfolio of rental properties in different cities or even sections of cities.