Most REIT Stocks Benefited From Fed's Decision

REIT stocks in general recently did well thanks to the recent decision of the Fed to not raise interest rates. Due to the anticipation of the Federal Open Market Committee (FOMC) meeting on Thursday, the market saw an increase with a further spike after the final decision itself was released to the general public. To be more specific, the MSCI US REIT Index RMZ went up by 3 percent, while the Vanguard REIT ETF VNQ went up by 3.1 percent.

Mostly due to the lack of inflation, the Fed has made the decision to keep federal fund rates between 0 and 0.25 percent. They also have made mention that the target U.S. inflation was around 2 percent, but the current rates are actually far from that. If you want to learn more details, you can read our post on the website ValueWalk (click here).

For the most part, all REIT stocks have generally performed rather positively, with the exception of lodging. This specific sector fell after the Fed’s announcement. However, healthcare was seen as the big performance leader out of all of the sectors this week. With no rise in interest rates, it seems the market has favored companies with long leases (healthcare) rather than companies with short leases (lodging).

In regards to other events taking place this week, shares of Trade Street common stock were de-listed following the announcement of the Independence Reality Trust IRT – Trade Street Residential merger, so we have made the decision to exclude Trade Street from our REIT list. Furthermore, STORE Capital STOR also saw an increased dividend rate of approximately 8 percent, taking the total to $0.27.

Disclaimer: This is not a recommendation to buy or sell stocks. The highest-yield stocks are not necessarily the best portfolio investment choice.