REITs remain on a roll.
Favorable industry fundamentals, strong balance sheets and a stabilizing US economy have combined to make real estate an attractive asset for investors, whose portfolios should continue to benefit for some time.
Publicly traded U.S. REITS, fully known as real estate investment trusts, — with combined market capitalization of more than $500 billion — have outperformed the broader stock-market , although investors would be wise to choose holdings based on sectors, geographic markets and company quality.
The FTSE NAREIT All REITs Index also outperformed the S&P 500 over the past three years, with nearly 28 percent in average annual returns, compared with roughly 14 percent for the S&P 500, as of July 31. Annual returns over five years averaged some 4.5 percent for the REIT index, versus 1 percent for the S&P 500.
Low interest rates , rising rents , strengthening demand and limited property supply bode well for REITs, which appeal to investors as relatively safe havens that represent real assets and provide solid dividend income. REITs typically invest in apartments, office buildings, hotels or other property types.Page 1 of 6 | Next Page