- MSCI and S&P Dow Jones at the end of August will be moving REITs out of the financial sector and into a separate REIT classification.
- David Kostin and team figure the move will lead to $19B in REIT-buying demand from active mutual fund managers. The biggest demand will come from those managers who currently have no REIT exposure as they will instantly be underweight the sector. Kostin figures this describes a whopping near-40% of large-cap core fund managers.
- While it might mean hefty support for the names in the weeks up to the change, the Fed and its on-again, off-again rate hikes might matter most.
- REITs represent 3% of the overall market today vs. just 0.1% in 2003. They represent 18% of the S&P 500's financial sector.
- ETFs: VNQ, IYR, DRN, RQI, URE, SCHH, ICF, RWR, SRS, RNP, RFI, JRS, KBWY, NRO, DRV, RIT, RIF, REK, FRI, DRA, FTY, FREL, LRET, PSR, WREI, XLRE, IARAX