U.S. REIT Management
Pavlic Investment Advisors Inc. strives to strike a balanced portfolio that invests the right percentage of your wealth in stocks, bonds, and REITs. We find REITs provide diversification for a well-balanced portfolio by offering superior risk adjusted returns compared to a traditional stock and bond only portfolio.
Publicly traded Real Estate Investment Trusts, or REITs, are an effective, liquid and low-cost means of investing in the best real estate properties in the world that otherwise wouldn’t be available to the average investor. Our REIT portfolio holds a prudent bias towards REIT sectors with long-term secular growth themes such as carrier 5G expansion in cell towers, continued eCommerce adoption in industrial warehouses, and cloud and interconnection computing in data centers.
REITs have been proven over time to generate higher investment portfolio returns while lowering the overall portfolio risk. REITs also serve as the quintessential inflation hedge as landlords with strong demand and supply profiles can push rents at or above the rate of inflation as leases roll. For a REIT to maintain its REIT status, it must pay 90% of its taxable income in dividends and generate at least 75% of its gross incomes from collecting rents. As a result, our average portfolio dividend yield is on average double that of the S&P 500. In summary, REIT’s offer:
- Long-term capital appreciation
- High, steady dividend income
- A hedge against rising inflation
- Enhanced portfolio diversification
Our wealth managers select high-quality U.S. REITs that provide an accessible way to invest in real-estate with long-term capital appreciation. We communicate which REITs are working and which aren’t in the portfolio, similar to our communication with clients in our stock and bond portfolios.
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