For instance, according to Cohen & Steers, historical data has shown that REITs can generate attractive returns in a rising rate environment.
“REITs have generated an average annual return of 11.4% over the six monetary tightening cycles that have occurred since 1979,” Cohen & Steers said. “Over the seven periods in this time frame when U.S. Treasury yields were rising, REITs generated an average annual return of 14.9%.”
Moreover, once prices picks up, REITs can also be used as an effective hedge against inflation. The asset class also shows low correlation to traditional assets. Consequently, more RIAs and investors may be looking at REITs as an attractive investment to diminish exposure to the broad equity moves. [Real Asset ETF Options with Smart Money Already Hedging Inflation]
Schwab US REIT ETF
For more information on the real estate investment trusts, visit our REITs category.
Max Chen contributed to this article.