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REITs Continue Soaring as Equities Fall

NEW YORK CITY-Over the last two weeks, the Morgan Stanley REIT Index has hit four new highs and this week it reversed $51 million in outflows from real estate mutual funds during that period with an inflow of $80 million.

By John Howe | Updated on August 20, 2001

NEW YORK CITY-The week before last, the Morgan Stanley REIT Index (RMS) hit two all-time highs in one week, and last week it repeated that performance, closing at 415.37 on Thursday and at 416.52 the next day. The previous week’s highs were 405.39 and 409.17. The strong performance of the RMS over the last few weeks has translated into a gain of 13.7% year-to-date while the equity indexes have fared poorly, particularly the Nasdaq, according to figures reported by the Bear Stearns REIT Monitor on Friday. The Dow Jones Industrial Average is off 5.1%, the S&P 500 is down 12% and the tech-heavy Nasdaq has plummeted 24.4% on a total return basis.

For the weeks ending Aug. 8 and Aug. 1, total net outflows from real estate mutual funds amounted to $51 million but that was more than compensated for during the week ending Aug. 15, which saw net inflows of $80 million. It has been almost a year since that much money was invested in these funds in a single week. Increased market values brought their total assets to $12 billion from $11.7 billion the week before.

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