10-yr U.S. Treasury currently sits at 2.72%
REITs have been major beneficiaries of the Federal Reserve’s shift in monetary policy. As the Fed exercises patience with future rate increases, investors have been buying REIT shares largely because of their large dividends and cheap valuations, according to the WSJ.
Sound Smart: The yield on the benchmark 10-year U.S. Treasury is 2.72%, which is below the 3.1% dividend yield offered by real-estate stocks in the S&P 500.
By the numbers: S&P 500 real-estate stocks have advanced 12% this year after slumping 5.6 percent last year (S&P 500 is also up 12%). Moreover, fund tracker EPFR Global has noted that there was $1.8 billion of inflows into global real-estate equity funds in January after 23 months of outflows.
Worth Noting: The Fed’s benchmark interest rate currently sits in the range of 2.25 to 2.5 percent.