Benzinga - It's no wonder why so many real estate investment trusts (REITs) have terrible market performance in 2022. After all, the Federal Reserve's ongoing rate hikes will continue to hurt the real estate sector.
Currently, exchange traded funds (ETFs) are down further than the S&P 500 — which is down roughly 17% year-to-date — it may be wise to stash these three funds in your watchlist.
Once the Fed decides to make a pivot, it will eventually be less expensive to borrow money for loans (REITs outperformed the S&P 500 from 1972 to 2019 with annual returns of 13.3% compared to 12.1%, respectively). Until then, these three REIT ETFs are offering steady dividends and will help diversify your portfolio:
Also Read: The Major REITS: Is A Bottom Now In Store Or Is This Another Relief Rally?
Invesco Invesco KBW Premium Yield Equity REIT ETF (NASDAQ: KBWY) offers a dividend yield of 6.78% or $1.40 per share annually, making monthly payments, with an inconsistent track record of increasing its dividends. The fund invests at least 90% of its total assets in the securities of small- and mid-cap equity REITs that have competitive dividend yields and are in the KBW Nasdaq Premium Yield Equity REIT Index.
Invesco's top three holdings include:
- Global Net Lease (NYSE: GNL) making up 6.63% of the fund
- Office Properties IT (NASDAQ: OPI) totaling 6.29% of the portfolio, and
- Necessity Retail REIT (NASDAQ: RTL) totaling 5.97% of the portfolio.
iShares' top three holdings include:
- Prologis (NYSE: PLD) totaling 7.73% of the fund
- Equinix (NASDAQ: EQIX) accounting for 4.31% of the ETF
- Public Storage (NYSE: NYSE:PSA) which accounts for 3.36% of the portfolio.
Vanguard's top three REIT holdings include:
- Prologis (NYSE: PLD) making up 7.26% of the ETF
- American Tower (NYSE: NYSE:AMT) accounting for 6.71% of the fund, and
- Crown Castle (NYSE: NYSE:CCI) which accounts for 4.1% of the portfolio.
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