On August 31st, Real Estate will become the newest GICS sector and the first Level 1 addition since the framework was unveiled in 1999—REITs had been classified as an industry under the Financials sector.
The list of new lows is dominated by yesterday’s darlings, “bond-like” stocks. In particular, Utilities and REITs have been hammered. However, not all of the stock market’s high yielders have been trashed.
Returning to REITs as an alternative to fixed income. Adding new 4% holding in both the Core and Asset Allocation Portfolios, with the focus exclusively on Residential and Health Care REITs. Weighted average yield of the new holding is about 5.7%.