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Real estate is an important asset class that every investor should consider owning as part of a well-diversified portfolio. REITs have historically provided investors an efficient way to diversify their investments to reduce risk and increase long-term returns.

REITs’ reliable income returns over time have been one of the chief drivers in the industry’s performance and a key attraction for investors saving for or funding retirement.

REIT dividends have outpaced inflation as measured by the Consumer Price Index in all but two of the last twenty years.

Over time, listed REITs have built a track record of providing a high level of current income combined with share price appreciation.

Stock exchange-listed REITs provide the easiest and most efficient way for all investors to invest in real estate.

Market and reporting transparency allows investors to easily determine the values of REITs and the assets they own.

U.S. REITs were established by Congress in 1960 to give all investors, especially small investors, access to income-producing real estate. Since then, the U.S. REIT approach has flourished and served as the model for around 40 countries around the world.

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. These are the characteristics of real estate investment.

Individuals can invest in REITs in a variety of different ways, including purchasing shares of publicly traded REIT stocks, mutual funds and exchange-traded funds. REITs also play a growing role in defined benefit and defined contribution investment plans.

REIT dividends can be taxed at different rates because they can be allocated to ordinary income, capital gains and return of capital. The maximum capital gains tax rate of 20% (plus the 3.8% Medicare Surtax) applies generally to the sale of REIT stock.

More than 40 countries and regions have adopted the U.S.-based REIT approach to real estate investment offering all investors access to portfolios of income producing real estate across the globe. Mutual funds and exchange-traded funds offer the easiest and most efficient way for investors to add global listed real estate allocations to portfolios.