Reap Double-Digit Dividends in Real Estate the Easy Way: American Capital Agency Corp. (AGNC), Chimera Investment Corporation (CIM)

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some real-estate stocks to your portfolio, the iShares FTSE NAREIT Mortgage Plus Capped Index Fund ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.48%. It also sports a whopping dividend yield above 11%.

This ETF has performed well, beating the world market over the past three and five years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why real estate? Perhaps because there's a finite amount of it, real estate tends to increase in value over time, though not always in a straight line. Real estate investment trusts (REITs), meanwhile, offer an extra benefit, via their requirement to pay out at least 90% of their income in the form of dividends. Mortgage REITs, such as those below, have some tailwinds, such as falling prepayments, but also some red flags.

American Capital Mortgage Investment Corp (MTGE), Brian Jackelow SAB Capital

More than a handful of real-estate companies had strong performances over the past year. Northstar Realty Finance Corp. (NYSE:NRF) surged 92%, for example, and yields 8%. It has increased its payout by about 80% over the past six quarters. Its revenue has been growing at a double-digit clip over the past few years, and offers the benefit of being diversified between real-estate debt, mortgage-backed securities, and the old-fashioned leasing of owned properties.

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