REIT shares have popped in the past two weeks primarily because flagging economic data has put the idea of multiple rate hikes into question. Steve Brown, portfolio manager of the American Century Real Estate Fund (REACX), said he expects this sentiment to last as the Federal Reserve stays cautious. 'The question is whether we are going to have another rate hike this year. Now that we are having that conversation, REITs have caught a bid,' said Brown. 'They’ve got good fundamentals and they are acting a lot better now and that should continue for the rest of the year.' The American Century Real Estate Fund is down 5% thus far in 2016, according to fund-tracker Morningstar. The $1.4 billion fund has returned 10% annually over the past five years, outpacing 87% of its Morningstar peers. Brown is also bullish on Kimco Realty (KIM), up 1.6% year-to-date, saying the company is well positioned because it owns community shopping centers rather than struggling malls anchored by troubled department stores.
More from REITs
These real estate investment trusts offer yields that are well over double that of the broader market, long dividend increase streaks, and favorable growth and dividend outlooks.
The technical signals for the REIT are mixed at best and don't inspire confidence.
REITs often yield three or four times that of the broader market, but not all REITs are created equal.