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REIT Relocation In The S&P 500 Could Trigger More Taxes


On Sep. 16 REITs will move out of the S&P 500 financial services sector and into a sector they can call their own, and the move could send a tax bill to your mailbox.

Investors who hold financial sector funds in taxable accounts should look into whether they will face a surprise tax should their fund sell its REIT to stay conformed during the index shift, the Wall Street Journal reports. Additionally, investors should ask their asset managers what will happen to their current REIT exposure given the category shift.

After all, you probably still want to be invested in REITs—they’ve averaged 9.8% annual returns since mid-2008 while bank stocks have achieved only 3.5% returns over the same period. [WSJ]