XLRE: Downgrade To Sell, As 5-Year Rough Patch Continues

Sungarden Investment Publishing
Investing Group Leader
(9min)

Summary

  • REITs, especially XLRE, have delivered mediocre returns since the pandemic, barely outperforming T-bills and offering little upside beyond dividends.
  • Rising interest rates and market indexation have eroded REITs' traditional advantages, making them less attractive for long-term, sleep-at-night strategies.
  • XLRE's largest holdings show lackluster performance, with only a few contributors; the sector remains vulnerable to further downside risk.
  • I downgrade XLRE to Sell from Hold, seeing better opportunities elsewhere and viewing the risk/reward as unattractive for dividend-focused investors.
  • Looking for higher risk/reward options trading ideas? I offer this and much more at my exclusive investing ideas service, Sungarden YARP Portfolio. Learn More »
Hand in glass jar full of money tipped over

ohmygouche/iStock via Getty Images

Investors learn the hard way that we are all entitled to our own opinions, but not our own facts. And the fact is, the REIT sector, by and large, has been a mediocre investment since the pandemic outbreak. And I see no signs of that improving.

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This article was written by

Sungarden Investment Publishing
7.88K Followers
I'm Rob Isbitts, founder of Sungarden Investment Publishing. I run the new investing group Sungarden Investors Club, a community dedicated to navigating the modern investment climate with humility, discipline, and a non-traditional approach to income investing. I've been charting investments since the 1980s, and I spent decades an an investment advisor and fund manager before semi-retiring in 2020. Now, this investing group is my focus. The markets tells us a story…we just have to listen! I teach subscribers how to do that.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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