A preferred approach to US REIT investments

Making the case for US REIT preferred stock in flexible real estate portfolios

Time to read: 5 min

When investors seek to take advantage of publicly listed real estate opportunities, they often favor traditional REIT common stock to gain exposure. This makes sense — from Oct. 1, 2008 through Sept. 30, 2018, US REIT common stock has provided attractive returns coupled with income generation, potential diversification benefits and a potential hedge against inflation.1 However, we believe US REIT preferred stock may offer a unique opportunity for investors to access real estate-like returns with even higher income (and lower volatility) versus traditional REIT common stock.

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Losses aren’t the only risk to worry about

Our balanced-risk approach is designed to manage the three main risks that all investors face

Time to read: 2 min

October greeted investors with steep stock market losses and a sense that risk had suddenly emerged after a relatively mild summer. But risk is always present for investors — and the possibility of losing money is just one form it can take. Below, I describe three principal challenges investors face, and the Invesco Global Asset Allocation team’s approach to managing those three risks.

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REITs: Bond proxy or barometer of economic growth?

Hint: REITs can participate in a growing economy

Posted by Paul Curbo, Portfolio Manager and Chris Faems, Associate Portfolio Manager

Time to read: 3 min

The September Federal Open Market Committee (FOMC) meeting saw the US Federal Reserve increase rates as expected. Additionally, the 10-year US Treasury yield has risen about 42 basis points (bps) off its lows in late August and is up almost 96 bps from a year ago.1 Historically, upward moves in the federal funds rate or US Treasury yields have typically led to diminished sentiment toward real estate investment trusts (REITs) and/or price pressure relative to general equities. But at Invesco Real Estate, we believe investors should remember that REITs are not bond proxies — these assets do not automatically fall in price as interest rates rise. Rising rates often reflect a growing economy, and REIT cash flows (and share prices) may participate in this growth.

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What’s under the hood of US REITs?

The case for active management in US REITs today

Time to read: 4 min

The accommodative monetary policies implemented by the US Federal Reserve after the global financial crisis have contributed to a broad-based, sustained economic recovery. However, during the past four years there has been a notable divergence in corporate performance among the US real estate investment trusts (REITs) we cover, with some deteriorating significantly. Given this trend, as well as the late stage of the US economic expansion, Invesco Real Estate believes active management is essential to find opportunities among higher quality REITs and potentially avoid those companies which may be most exposed to further deterioration.

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Alternative investments for the real world

How alternative investments may complement different portfolio objectives in various market environments

Time to read: 3 min

My last four blogs have defined alternative investments, explained why I believe investors should consider them, discussed performance expectations and outlined how to deploy alternatives in a portfolio. In this final installment of my series, I will apply these lessons to the current volatile market environment and discuss which alternatives may be able to help in various scenarios.

Below, I’ve listed several common investor portfolio objectives. While there are no guarantees that performance will meet expectations, each objective is paired with an alternative strategy that may help investors meet specific goals. 

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Selecting an alternative strategy

How to incorporate alternatives into a portfolio

Time to read : 4 min

I’ve written this summer about the potential benefits of alternative investments. Let’s assume that readers of my previous blogs agree that my ideas have some merit and it is time to diversify into alternatives (alts). The devil is always in the details. Of all the different alt funds available, which is best for a given investor? And where does it fit in a portfolio? In this blog, the fourth in my series explaining the basics of alts, I will suggest a process that may help investors select the best alternative strategy for their objectives.

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