Why Look to REITs for Opportunities?
HEDGING AGAINST INFLATION Property stocks and REITs have often been viewed as inflation hedges because expected inflation will affect prices of real estate, and rental income tends to rise along…
RETURNS AND RISKS OF REITS REIT and property stock performance has been relatively strong over the long term, especially when compared with traditional bond and equity indices. Since 1992, the…
COMPARING DIVIDEND YIELDS ACROSS ASSET CLASSES Since 1999, approximately half of the total return of the Dow Jones U.S. Select REIT Index has come from dividends. During periods of heightened…
To qualify as a REIT, a company must have most of its assets and income tied to real estate investment and must pay out almost all of its taxable income…
The Evolution of REITs The basic concept of REITs originated with the business trusts that were formed in Massachusetts in the mid-19th century, when the wealth created by the industrial…
By Michael Orzano, Director, Global Equity Indices Publicly traded property stocks, including real estate investment trusts (or REITs) and real estate operating companies (or REOCs), allow investors to gain exposure…
Not only do REITs (RWR)(ICF) help diversify a portfolio, but they also bolster portfolio income with their steady dividends and their long-term capital appreciation.
REITs (IYR)(VNQ) are known for their high dividend yields, outclassing almost all other broad market indices.
Not only do REITs tend to provide steady and stable returns over the long term, but they also help in diversifying investor portfolios effectively.
The REITs (IYR) sector has shown phenomenal growth over the years. In the past five decades, REITs have grown to a market cap of nearly $1 trillion.
Let’s talk about the two main types of REITs (ICF)—equity REITs and mortgage REITs.
In this series, we’ll get down to the brass tacks of investing in the REIT sector, the market’s current landscape, and the benefits you can expect from this type of investment.
Mortgage REITs such as Annaly Capital Management (NLY), MFA Financial (MFA), and American Capital Agency (AGNC) are big holders of Ginnie Mae TBAs.
For the week ending August 19, Fannie Mae TBAs ended at 103 17/32—down 7 ticks for the week. The ten-year bond yield rose by 7 basis points to 158 basis points.
Mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.
Ten-year bond yields influence everything from mortgage rates to corporate debt. Now, they’re the benchmark for long-term US interest rates.
The highlight of last week was the FOMC minutes. Bonds rallied on the FOMC minutes, but a global bond sell-off reversed the gains on Friday.
QE increased the size of the Fed’s balance sheet almost eightfold since the turn of the century. Currently, the Fed’s balance sheet holds around $4.5 trillion.
In the FOMC’s June meeting, members reviewed the financial situation. Members discussed the state of the credit markets and the interbank market.
The FOMC minutes noted that inflation has remained well below the Fed’s 2% target. Consumer prices rose by 1% over the past year.