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Even though they look tempting, when you really look at the data, mortgage REITs (mREIT) "just don't deliver," REIT analyst Brad Thomas says in a report.
In fact, only one asset class has fared as badly as mortgage REITs over the past five years: international stocks. A group of the only 10 REITs with 10 years of history averaged a -.25% return over that time compared to around 6.5% from both the S&P 500 and equity REIT index, Seeking Alpha reports.
The odds of selecting the “correct” mortgage REITs are slim to none, since even the top quarter of the mREIT index is unlikely to outperform the broader Vanguard REIT Index ETF.
Interestingly enough, Brad’s position counters another recent SA article, suggesting that mREITs do, in fact, deliver—despite their negative rap. [SA]
