Trustnet Magazine 88 October 2022 | Page 57

IT Property the leases ,” he says . “ Over the long term , we expect property to act as an inflation hedge , but in the short term this may not be the case .”

While some investors think they should avoid REITs – and property in general – when interest rates are rising , Jon Cheigh , manager of the Cohen & Steers Global Real Estate Securities fund , notes the data says differently .

“ Although sharp increases in interest rates may unsettle markets in the near term , history shows that the direction of the economy and job growth tend to have a greater impact on REIT returns than rising rates do ,” he explains . “ In other words , the environment that may be pushing the Federal Reserve to raise rates is one that can benefit REITs in the form of higher rents .”

All in time To put the performance of REITs into perspective , Cheigh says Cohen & Steers analysed the 12 largest one-month increases in 10-year US treasury yields dating back to

IT Property Rest of the World ( -2.6%)

10 % 5 % 0 % -5% -10% -15% -20% -25%

IT Property UK Commercial ( -14.3 %)

IT Property UK Residential ( -19.3 %)

Source : FE Analytics

Issue 88 - October 2022 / 57 /