Dividend Capital
Total Return
Strong Portfolio Returns — REITs Outperform Major Indices
Adding REITs to a portfolio can provide income and growth, potentially increasing the overall return of stock- and bond-only portfolios. In fact, despite the recent REIT market correction, for the past 30 years, the NAREIT® Equity REIT Index has gernerally outperformed the S&P 500®, Russell 2000, NASDAQ Composite and Dow Jones Industrial Average. The highest return for each period is indicated in green in the chart below.
Source: NAREIT, October 2008. Past performance is not a guarantee of future results. This material is for informational purposes only, and does not reflect the actual return of a specific investment. The NAREIT Equity REIT Index includes all REITs that trade on the New York Stock Exchange, American Stock Exchange and NASDAQ National Market list, and is considered representative of the equity REIT market. The S&P 500 Index is an unmanaged index of the 500 largest stocks (in terms of market value), weighted by market capitalization and considered representative of the broad stock market. The Russell 2000 Index is an unmanaged index of the smallest 2,000 securities in the Russell 3000 Index, and considered representative of the U.S. small-cap equity universe. The NASDAQ Composite represents all stocks that trade on the NASDAQ stock market, weighted by capitalization, and is considered representative of the broad equity market. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. Companies included in the S&P 500, Russell 2000, NASDAQ Composite and Dow Jones Industrial Average are not required to pay dividends, while companies included in the NAREIT Equity REIT Index must pay 90% of their taxable income to shareholders in the form of dividends. There is no guarantee that shareholders of a REIT or real estate mutual fund will receive dividend distributions from such investments. These indices are used in comparison to the NAREIT Equity REIT Index in order to illustrate the differences in historical total returns generated by REITs, non-REIT stocks and bonds. Investors cannot invest directly into any index. Investments in real estate may be subject to special risks associated with operating and leasing properties, as well as risks due to changes in economic conditions, interest rates, property values, and supply and demand, in addition to possible environmental liabilities, zoning issues and natural disasters.
1 Price-only returns are listed for the NASDAQ Composite.