Despite concern over the implications of a rate hike by the US Federal Reserve, US REITs remain an attractive asset class, says CenterSquare Investment Management.
CentreSquare Investment Management chief investment strategist Scott Crowe said that as a result of low bond yields, US REITs are increasingly attractive.
“This is arguably the most important longer-term variable for the real estate cycle and hence the global REIT market over the longer term,” he said.
“China’s undeniable slowdown is producing headwinds for sure. However, the US market looks very attractive given REITs have underperformed due to misplaced concern over the outlook for the Fed rate rise and the fact that China, oil, European money printing and low domestic inflation mean that long bonds will stay low.”
Mr Crowe also pointed out that current market conditions require investors to adopt regional approaches when it comes to REITs.
“These are exceptional times and successive moves over the last six months have our global concentrated portfolio +400 [basis points] overweight US stocks and -400 [basis points] underweight Asia Pacific.
“This is in direct response to what we are seeing play out globally,” said Mr Crowe.
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