Bennelong Funds Management

Many assume rising US interest rates will be a headwind for listed real estate performance. For investors who view listed real estate as a proxy for bonds or as a ‘yield play’, this view is understandable. However, real estate is not a proxy for bonds – nor should it be viewed as simply a yield instrument. It is a risk asset that generates a total return comprised of yield and growth. Therefore, it is in no way a certainty that rising US interest rates will be a negative for listed property. There continues to be some concern how financial markets will react if/when the US Federal Reserves begins a cash rate tightening cycle. The strong October employment report suggests this cycle may begin as early as December. So how did listed real estate (US REITs) perform in the following years until the last rate hike? Read the full article here: (VIEW LINK)



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