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Consider buying the dip in REITs - Morgan Stanley

Published 01/16/2018, 10:27 AM
Updated 01/16/2018, 10:27 AM
© Reuters. Consider buying the dip in REITs - Morgan Stanley
  • "Too far and too fast," say Richard Hill and team of the shellacking in the REITs this year. As measured by the iShares U.S. REIT ETF (NYSEARCA:IYR), the sector fell more than 4% in 2018's first two weeks vs. a 4% gain for the S&P 500.
  • The story is a familiar one: An already-cruising economy is to get a further boost from tax cuts - that and a soaring stock market (ex-REITs, of course) assures a steady stream of Fed rate hikes. Who needs income favorites in that scenario?
  • Hill, however, notes commercial MBS prices have been on the rise even as Treasury yields climb. A mean reversion in REIT stock prices could be at hand.
  • Source: Bloomberg
  • The IYR, by the way, is bouncing - up 1.5% today.
  • ETFs: VNQ, IYR, RQI, SCHH, RNP, RFI, KBWY, DRN, NRO, URE, ICF, XLRE, JRS, RWR, SRS, FREL, DRA, DRV, RIF, LRET, REK, RIT, FRI, FTY, PSR, USRT, WREI, IARAX, RORE
  • Now read: Hybrid Income Strategy: 7% Yield


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