Investors Hide From Inflation in Real-Estate Stocks

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Investors looking to cushion their portfolios against inflation helped real-estate stocks lead the S&P 500 in recent weeks

slumped 43% in 2020 as stay-at-home orders closed shopping centers, but has gained 54% so far this year.

Investors need to sweat the details of their real-estate bets: Some properties, like offices and retail, can have very long leases. If those agreements don’t adjust rent to account for inflation, landlords could see their real incomes shrink. But overall, equity investors see the sector as an attractive corner of the market when prices are rising.

Lackluster bond yields have made the real-estate segment’s dividend payments more appealing. The yield on the benchmark 10-year U.S. Treasury note settled at 1.498% on Tuesday while the real-estate sector of the S&P 500 has a dividend yield of 2.5%. The broader index has a 1.4% dividend yield.As rental-home investors around the U.S.

 

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