Stock exchange-listed REITs outperformed the broader U.S. equity market in 2015. Additionally, in a year in which large-cap stocks outperformed mid- and small-caps, large-cap REITs outperformed other large-cap equities. REITs also outperformed small-cap growth and value stocks, financials, utilities, global stocks and hedge funds.
The FTSE NAREIT All REITs Index, the broadest benchmark of the listed U.S. REIT industry that includes both Equity and Mortgage REITs, delivered a total return of 2.29 percent in 2015. The FTSE NAREIT All Equity REITs Index produced a total return of 2.83 percent for the year, while the total return of the FTSE NAREIT Mortgage REITs Index fell 8.88 percent. In comparison, the S&P Composite 1500, which, like the REIT market, includes large-, mid- and small-cap stocks, returned 1.01 percent.
REITs’ total return advantage was magnified in the performance comparison between large-cap REITs and other large-cap stocks. The FTSE NAREIT Real Estate 50 Index, representing the 50 largest U.S REITs by equity market capitalization, delivered a 4.40 percent total return for the year, compared to a 2.64 percent total return for the S&P 100.
Stock exchange-traded REITs outperformed most other stock indices in 2015. For a comparison of the 2015 performance of REITs and other equity indices, see NAREIT economist Brad Case’s Market Commentary Blog post on REIT.com