Are REITS Right For A Bond Rally?
Over the past six months, the 10-year Treasury yield rose by nearly a full percentage point, and REITs (Real Estate Investment Trusts) paid the price. XLRE, the State Street Real Estate ETF, was essentially flat, whereas the S&P 500 gained 18%. Clearly, higher yields are influencing REIT prices more than equity performance; thus, our question is: are REITS a good equity sector to buy if you think yields have peaked and will decline? To assess this, we looked at the correlations of XLRE's top holdings to 2yr, 5yr, and 10yr Treasury yields. We also considered the recent relative performance…
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