While the broader equities market started off the new year on the wrong foot, real estate investment trust-related exchange traded funds are rallying.
Over the past three trading sessions, REIT ETFs have been on the rise, with the Vanguard REIT ETF (NYSEArca: VNQ) up 2.4%, iShares Dow Jones US Real Estate Index Fund (NYSEArca: IYR) 1.6% higher and SPDR Dow Jones REIT ETF (NYSEArca: RWR) up 2.5%.
The REITs space may be advancing as investors turn to the more attractive yield-generating option with benchmark 10-year Treasury yields dipping below 2% Tuesday. For instance, VNQ has a 3.13% 12-month yield, IYR has a 3.66% yield and RWR has a 3.06% yield.
Nevertheless, REITs may continue to strengthen ahead as the space experience graeter merger and acquisition activity, reports Janet Morrissey for TheStreet.
“We have recently ratcheted up our takeout odds at a number of REITs,” Green Street Advisors said in a report.
Green Street believes that after a sudden plunge in M&A activity following the financial downturn, deals will begin to pick up due to timing, valuations and rising pressure from activist investors. [Despite Rate Risk, REIT ETFs Could Still Perform in 2015]