(Editor’s note: Opinion pieces are published for discussions purposes only.)
The threat of rising interest rates is raising real fears about real estate mutual funds.
Investors have pulled money out of real estate funds for two straight months, even though they remain among the year’s best performers and pay bigger dividends than many stock funds. The worry is that rising rates will hurt growth for the owners of apartment buildings, offices and other commercial real estate, as well as limit demand for their stocks.
Before joining the crowd, bear in mind that rising rates don’t always mean losses for real-estate funds. Many have delivered solid returns even during periods of rising interest rates. The key is how quickly and how high rates rise. Real estate fund managers say they can still make money for investors, though they acknowledge that the performance won’t be as good as this year and the recent past.
If you’d like to discuss real estate matters, contact Rose Law Group founder Jordan Rose, email@example.com