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BPYUP - KBWY: The Highest-Yielding REIT ETF Has The Lowest Returns
Brookfield Property REIT Inc. 6.375% Series A Preferred Stock
Small-cap REITs trade at low P/FFO multiples and often pay out higher dividends, leading to the notion that they may be undervalued.
There are justifiable reasons for the persistent low multiples of small-cap REITs, as they have high leverage, external management, and poor earnings growth.
KBWY holds a basket of small-cap REITs, and has poorly allocated investor capital over the past year. Chasing yield has been a bad investment strategy.
There are still some solid values in the small-cap REIT space, though a one-size-fits-all approach will likely produce low returns.