While valuations may be a cause for concern, fund managers and analysts are not overly bearish. REITs still benefit from the low interest rate environment, little new construction and positive economic growth.
The REITs market has also benefited from the slowly recovering real estate market. Additionally, some investors have used commercial real estate as a way to hedge against inflation – as landlords, REITs operators can just raise the rents during inflationary periods. [‘Steady Diet’ of Real Estate ETFs Can Help Boost Yield]
Some REIT ETFs include:
- Vanguard REIT ETF (NYSEArca: VNQ): 3.41% yield
- SPDR Jow Jones REIT ETF (NYSEArca: RWR): 3.10% yield
- iShares FTSE NAREIT Real Estate 50 Index Fund (NYSEArca: FTY): 3.66% yield
- First Trust S&P REIT Index Fund (NYSEArca: FRI): 2.36% yield
For more information on real estate investment trusts, visit our REITs category.
Max Chen contributed to this article.