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  • Alex Pettee, CFA

Inflation Is Worse Than It Looks

  • U.S. equity markets snapped a five-week winning streak as red-hot inflation data showed that consumer prices soared at the fastest rate in decades, sparking a sell-off in longer duration assets.

  • Retreating from record-highs set last week, the S&P 500 slipped 0.3% this week as investors rotated out of tech stocks and piled into inflation-hedging asset classes including gold and bitcoin.

  • Real estate equities were mixed on the week as strength from housing sectors - one of the best inflation-hedges - was offset by weakness among retail and hotel REITs.

  • Concerns over inflation sent the University of Michigan’s consumer sentiment index tumbling to a 10-year low in the preliminary November reading - significantly worse than expectations.

  • We saw a busy week of M&A news in the REIT sector as two data center REITs - CoreSite and CyrusOne - are acquisition targets while hotel REIT CorePoint was taken private while single-family rental REITs eye Zillow's portfolio.

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Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds listed on the NYSE. In addition to any long positions listed below, Hoya Capital is long all components in the Hoya Capital Housing 100 Index and in the Hoya Capital High Dividend Yield Index. Index definitions and a complete list of holdings are available on our website.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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