The FTSE Nareit All Equity REITs Index declined 2.4% in March as broader market equities suffered greater losses, with the Russell 1000 declining 5.8% and the Dow Jones U.S. Total Stock Market falling 5.9%. Uncertainty related to future economic growth, consumer sentiment, and concerns about inflation and the fiscal outlook led to volatile market conditions.
Year to date, the FTSE Nareit All Equity REITs Index has gained 2.9%, while the Russell 1000 has declined 4.5% and the Dow Jones U.S. Total Stock Market has fallen 4.9%.
The yield on the 10-year Treasury rose 1 basis point in March, ending the month at 4.21%, though it ranged from 4.15% on March 3 to an intra-month high of 4.37% on March 27. As of March 31, the dividend yield on the FTSE Nareit All Equity REITs Index was 3.96% and the FTSE Nareit Mortgage REITs Index yielded 12.27%, compared to 1.30% for the S&P 500.
As shown in the chart above, the 10-year Treasury yield ended March where it began the month as REITs posted a narrow loss. The 10-year Treasury yield hit 4.97% on Jan.14 and declined 58 basis points through the end of March. Over this period, REITs have posted a total return of 6.5%.
As reflected in the table above, telecommunications, gaming, and health care led at the property sector level in March, while single family homes and free standing retail were both positive at the subsector level. Lodging/resorts, data centers, and industrial lagged all other property sectors for the month.
The FTSE Nareit Mortgage REITs Index fell 4.4% in March, with both home financing and commercial financing posting negative returns.