Best High-Yield REIT CEFs - For Growth And Income - Yields Up To 11%

4/3/17

By Rida Morwa, Seeking Alpha

Summary

  • Property REITs sold off about 12% from their peak in early September following higher interest rates by the U.S. Fed.
  • Historically, the forward returns following these acute periods when REIT shares sell-off are quite attractive, typically exceeding the returns of the broad markets.
  • Misconception about REITs and rising interest rates: Property REITs tend to increase in price during periods of rising interest rates.
  • The selloff has created a unique opportunity for high-yield investors to buy into this space.
  • Not all property REIT CEFs are alike. Best ones to buy for income and growth - yield up to 11%.


Property REITs sold off by 12% since their September peak after the U.S. Fed implemented two rate hikes of 0.25%; The sector did not participate much in the recent market rally. Sharp declines in REIT share prices due to fears of quickly rising interest rates have occurred regularly in the past and have acted as attractive entry points for the group. Below is a chart depicting the price movement of the property REIT ETF (NYSEARCA:VNQ):

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