Whether it’s government bonds or technology stocks, mutual funds or exchange-traded funds, just about every type of investment a person can make these days is thoroughly scrutinized by analysts and the business media. As a result, investors have no shortage of opinion to draw upon.

When it comes to Real Estate Investment Trusts (REITS), an interesting trend has emerged: REITs are gaining more and more of a well-earned reputation as strong investment vehicles.

Consider:

• In February, the Financial Post published an article headed “Canadian REITs poised to beat the market in 2012.” It started as follows: “Canadian real estate income trusts vastly outperformed the broader equity market in 2011 and are poised to be solid money makers once again as yield-hungry investors continue their pursuit of rising distributions, say analysts.” The article goes on to quote analysts from CIBC World Markets, RBC Capital Markets, and Dundee Capital Markets – all offering bullish views on REITs. Click here for article.

• Yahoo! Canada ran a Money article in February called “REIT Investing – Best New Money Moves.” It had a strongly bullish message, concluding that “over the long run, REITs deserve a 5% to 10% stake in your portfolio because they are a good hedge against inflation and help diversify your sources of income.” Click here for article.

• Last fall, The Globe and Mail carried an Investor Clinic article entitled “Housing your investments in REITs”. It included reference to a report by CIBC that “laid out a bullish case for REITs.” The article quoted the CIBC report: “A low-interest-rate environment … could continue for an extended period of time, perhaps several years … (which) could support double-digit total returns for REITs over the next two to three years.” Click her for article.

• Late in 2011, the “Boomer & Echo” blog ran a post detailing the attractiveness of REITs. The authors wrote that “for investors looking for stable monthly income from their portfolio, Canadian REIT’s are definitely worth a look.” They noted that “with savings accounts and GICs paying next to nothing, and government bonds yielding around 2% … REITs are tempting for yield-hungry investors.” Click here for article.

• The blog of “The Dividend Guy” carried a piece called “Why should you consider Canadian REITs in your portfolio?” The author wrote that it’s “a simple question with a simple answer.” He observed that “a very low mortgage rate environment and stricter lending policies” mean higher profits for REITs and lower risks making this “a great time to invest in REITs.” Click here for article

One point not often made in most of these articles is the important distinction between public REITs and private REITs. You can read more about the differences between public and private REITs in the education section of the LEAGUE website.

With RRSP contributions wrapped up for 2011, and tax filing season on the doorstep, many investors find this is a good time to be examining their portfolios. As you think about your holdings, keep in mind the important role private REITs can play to both boost your yield and protect you from the gyrations of the stock market.

DISCLAIMER:  

This document is for information purposes only and is not an offer to sell or a solicitation of an offer to purchase securities. Any offering will be made by way of offering memorandum or, in Ontario and Quebec, will be made only to accredited investors or those investing more than $150,000.

There are risks associated with this investment. These risks are discussed in the offering memorandum and subscription agreement. You are encouraged to read the offering memorandum (available upon request) and the subscription agreement before making your investment decision.