Asset Allocation
Consumers are shopping more online, which has not only hurt retailers but also property owners, including retail real estate investment trusts (REITs). The industry has struggled broadly, but U.S.-based companies have been hit hardest. Over the last five years, the U.S. Retail REITs industry has lagged the MSCI USA Index by 85%. In contrast, similar companies outside of the U.S. have trailed the MSCI World ex US Index by only 27%. International retail REITs have been more resilient for a couple of reasons. International consumers don’t shop online as much as they do in the U.S. And European department stores don’t anchor shopping malls – meaning that the malls aren’t as reliant on successful department stores to maintain foot traffic. The industry remains pressured both in the U.S. and abroad, but ultimately the long-term outlook for any individual REIT depends on its portfolio of properties. Investors should consider a bottom-up approach to research, which may help uncover companies with better prospects trading at attractive values.
Past results are not predictive of results in future periods.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries.
MSCI does not approve, review or produce reports published on this site, makes no express or implied warranties or representations and is not liable whatsoever for any data represented. You may not redistribute MSCI data or use it as a basis for other indices or investment products.
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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.