Investors flocked back to real estate investment trusts this week, in a trade that looks like a search for yield and a play on a more aggressive housing recovery.
REITs had fallen out of favor in recent days as the market worried about rising yields and overbought conditions. The trusts trade like stocks and invest in real estate across a number of classes, but primarily in commercial and multi-family dwellings.
The FTSE NAREIT U.S. Real Estate Index is up just 1.84 percent in price this year, badly trailing the S&P 500 stock market index gain of 13.5 percent.
However, the index is up more than 2 percent over the past week as bargain hunters have stepped in amid rampant selling in the equity and bond markets.
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The trend has shown up most visibly in the iShares Dow Jones U.S. Real Estate exchange-traded fund, which holds a number of large REITs. Its biggest component is Simon Property Group, followed by American Tower.
By a large margin, the fund has seen more inflows than any other ETF this week.
It has taken in some $695.3 million, a trend that has completely reversed all the voluminous outflows for the year. It now has taken in $1.7 million so far this year, according to IndexUniverse.
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