The REITs ETFs include exposure to various sub-sectors including, diversified REITs, healthcare REITs, hotel & resort REITs, industrial REITs, office REITs, residential REITs, retail REITs and specialized REITs.
Looking ahead, Nelson argues that the best years are yet to come, pointing to below-peak-level occupancy rates and rents. Additionally, recent gains in REITs are below the level required to support new construction. Consequently, we could see more good years for property markets as rising property demand helps lift occupancy and rents for existing properties.
However, there are some potential risks. A slowdown overseas, along with a surging U.S. dollar, could hurt U.S. exports. Geopolitical turmoil could trigger short-term volatility. An end to the Federal Reserve’s loose monetary policies could also slow growth. [Fundamentals to Support REIT ETFs, Outweighing Rate Risk]
For more information on real estate investment trusts, visit our REITs category.
Max Chen contributed to this article.