Morgan Stanley IM: A Compelling Opportunity in REITs

KEY TAKEAWAYS

• REITs have significantly underperformed the broader U.S. equity market over the past five years, primarily due the effects of COVID-19 and rising interest rates
• As a result, REITs are inexpensive today, especially when compared to the broader equities market
• REITs also have historically performed well when interest rates stabilize and start to drop
• Given the Fed is expected to start cutting interest rates in 2H24, we believe now is an excellent time to consider an allocation to REITs

^{RISK CONSIDERATIONS
The value of investments may increase or decrease in response to economic and financial events (whether real, expected or perceived) in the Europe and global markets. The value of equity securities is sensitive to stock market volatility. Real Estate Risk: The risks associated with ownership of real estate and the real estate industry in general include fluctuations in the value of underlying property, defaults by borrowers or tenants, market saturation, decreases in market rents, interest rates, property taxes, increases in operating expenses and political or regulatory occurrences adversely affecting real estate. Real estate investment trusts (REITs) are subject to risks similar to those associated with the direct ownership of real estate, and they are sensitive to such factors as management skills and changes in tax laws. Concentration Risk: Concentration in a single region may make the portfolio more volatile than one that invests globally.}