Low Treasury yields may help US REITs to outperform

US equity real estate investment trusts (REITs) have underperformed ordinary US equities considerably in 2020 despite a plunge in US Treasury yields, which usually provides more of a boost to the former than the latter. However, we expect US REITs to outperform over the next few years, as the US economy recovers from its coronavirus-induced slump, and Treasury yields remained well-anchored by Fed policy.