This year the leading role is played by real estate investment funds, which are often viewed primarily as a way to diversify the portfolio.
The FTSE Nareit All REITs – the broadest REIT index in the US with a market cap of $ 1.4 trillion – had a total total return including dividends this year at July 31 at 26.05%, up from 17.99% for the index. S&P 500.
REITs have capitalized on fears about inflation, says Todd Rosenbluth, head of ETF and mutual fund research at CFRA. Real estate is often considered inflation insurance.
Low bond yields are also fueling interest in REITs, Rosenbluth said. REITs must pay shareholders 90% of taxable income as dividends. The current average dividend yield of the FTSE Nareit All REITs is 3%.
Finally, the outlook for residential and commercial real estate for the second half of 2021 as the economy continues to emerge from the pandemic is also supported by REITs, Mr Rosenbluth says.