RLTY - RLTY: REIT CEFs Are A Buy Before The Fed Cuts Rates
2024-06-26 05:27:04 ET
Summary
- The REIT rebound is in full swing, with likely rate cuts in the next six months.
- RLTY is one of four REIT focused CEFs from CNS, but has underperformed since launch in 2022.
- We explore key differences against the other funds in the lineup and why RLTY may outperform ahead.
The REIT rebound is in full swing. At this time, rate cuts appear all but certain in the next six months. As optimism around rate cuts began to dwindle, investor fervor around the real estate sector faltered during the first half of the year. Following a powerful rebound in the fourth quarter of 2023, REITs and real estate ( VNQ ) were virtually flat through the first quarter. The second quarter started tempestuously as investors had their hopes dashed around potential rate cuts before the arrival of summer.
The June Federal Reserve meeting proved an inflection point in interest rate sentiment. REITs and similar income producing assets are directly impacted by movements in interest rates. At the June meeting, the Federal Reserve announced the decision to hold the federal funds rate steady as expected by most investors. The decision is unsurprising coming from a Federal Reserve who has repeatedly announced their intent to stick to an inflation-based rate policy....
RLTY: REIT CEFs Are A Buy Before The Fed Cuts Rates