REITs have marked time year-to-date, but recently operating conditions have downshifted a notch. Three key drivers argue for lightening up exposure on this newly formed S&P GICS1 sector. First, REITs have been unable to materially…
Highlights Portfolio Strategy The energy bear market is drawing to a close. Lift exposure to above benchmark. Firming refining operating conditions, at the margin, suggest that it no longer pays to underweight this energy sub-group.…
Highlights Portfolio Strategy Operating leverage could surprise on the strong side this year, based on the message from our pricing power and wage growth indicators. REITs are experiencing a playable recovery following the Fed-…
Highlights Recommended Allocation The sweet spot of non-inflationary accelerating growth is likely to continue. European politics will fade as a risk, and Trump should still be able to get tax cuts through. We continue to be…
Highlights Key Portfolio Highlights Improved world economic growth and rising inflation expectations have buoyed global equities (Chart 1). The downside is that financial conditions are tightening and U.S. dollar-based liquidity is…
The Treasury bond sell has undermined the REIT sector, but that has created excellent value. Our REIT valuation gauge is one standard deviation below the mean, an excellent starting point for forward relative returns. Now that Treasury…
Highlights Portfolio Strategy A battle between tighter monetary conditions and the anticipation of fiscal largesse will be a dominant market theme this year. Our high-conviction equity allocation calls do not require making a major…
The REIT index is oversold and undervalued on a cyclical basis, and fundamentals are improving, as shown in the previous Insight. Contrary to popular perception, relative performance is also depressed from a structural perspective. The…
The backup in global bond yields has provided investors with an excuse to sell any high yielding sector or group, regardless of valuation. For instance, the short-term relative performance of the S&P REIT index has been highly…