Since the beginning of the year, it seems that most REIT ETFs have dropped around 5% (e.g., IYR) while stocks have done really well.

Were there any market/economic/political events recently that caused the price of REITs to go down?

Given that 5% is a significant drop, there should be some rational and objective explanation for it. I tried Googling for news about REITs, but you just get a bunch of sites with no useful content.

For a particular example, let's use IYR which is traded in the US.

  • Are you including the end of 2017 and considering the end of year dividend? – user662852 Jan 18 '18 at 17:52
  • @user662852, good question, but the dividend was mid December so not related to that. – gaefan Jan 18 '18 at 18:19
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    You might want to qualify which markets you are referring to. REITs trade on a number of exchanges in a number of countries around the world. – Chris W. Rea Jan 18 '18 at 20:43
  • @ChrisW.Rea, I had mentioned IYR, but edited the question to make it a more explicit example. – gaefan Jan 19 '18 at 13:33

It's hard to give an objective answer to this question. REITs tend to behave more like bonds than like stocks. The expectation of rising interest rates, as well as a general "risk on" mood, could explain the underperformance. The effects of tax reform might also affect REITs.

  • Yes, I expect you are right, but I was hoping there might be a more satisfactory explanation. I also noticed today that nearly all trading of IYR is at market open/close so I suspect that the trading is mostly by firms/institutions and very little by individual investors. – gaefan Jan 22 '18 at 17:46

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