Cache / REITs

Cache / REITs: the Reits sector has been weak since mid May to date. Hawkish posturing by the Fed and rising long term bond yields are the likely reasons for yield plays losing their shine. Reits may be impacted in a rising interest rate environment because: - safer fixed income instruments become relatively more attractive, and - Reits are leveraged vehicles, so the cost of funds can be expected to rise, thereby lowering distributions and Reit yields.