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REITs In 2020: Good, Bad, And Ugly

  • U.S. equity markets finished an unforgettable 2020 at record highs despite the unprecedented ongoing global pandemic, rallying back from a historic market sell-off that pushed financial markets to the absolute brink.
  • Finishing the year with returns of 17.6%, the S&P 500 finished higher by 1.3% on the final week. Despite the reopening-rebound, Mid-Caps and Small-Caps lagged on the week and for 2020.
  • For real estate equities, 2020 was a story of "essential vs. non-essential." Ending the year with returns of -5.5%, the Equity REIT ETF gained 1.3% on the final week.
  • The "essential' property sectors - housing, technology, and logistics - led the way in 2020. For housing, robust levels of homebuying activity have clashed with record-low inventory levels to put substantial upward pressure on home values.
  • Rising home values - along with WWII-levels of fiscal stimulus - have been largely responsible for the nearly 8% annual rise in total U.S. household net worth in 2020.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com. Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

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.