Seeking Alpha

Valuations not yet low enough for REITs

  • REITs may look enticing after their big selloff this summer, but leave them on the bench for now, says Ranger International's Jeff Middleswart. He notes the FTSE NAREIT Index had nearly a 1-to-1 correlation with the S&P 500 over the last 2 years (far higher than that of MLPs or utilities) - not great for investors looking for assets uncorrelated to the market. Now - with rates rising - REITs are behaving more like bonds thanks to their history of meager dividend growth.
  • REIT ETFs: FRI, WREI, FTY, ICF, IYR, REM, REZ, RTL, PSR, KBWY, SCHH, RWR, VNQ, DRN, URE, DRV, SRS, REK, ROOF.
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