A significant shift in money flows saw smart money leaving REITs, in anticipation of higher rates sooner than later thus making these almost fixed rates REITs less attractive in the near future. Where did the funds flowed to? Surprisingly, equities. Which is to say, while smart capital sees higher interest in the near future, they also see good corporate profits outlook and/or a more robust economic recovery, esp in the USA.
The negative skew for November’s returns overall kept last month’s advance for the Global Market Index (GMI) to a tepid 0.8%. The numbers still look encouraging on a year-to-date basis, however. Indeed, GMI is higher through the first 11 months of 2013 by a strong 12.9%, thanks in no small part to soaring stock markets in the developed world. The MSCI EAFE’s total return so far this year is an impressive 21% while the Russell 3000 in the US is ahead by more than 30%. If you exclude those two pieces of the global asset pie, the performance numbers for global multi-asset class strategies are considerably weaker.