When building a portfolio, aside from returns, one of the biggest things investors look for is diversification.
We all know having a bunch of different asset classes that move in different directions is vital for lowering volatility and creating better returns. The standards for diversification have long been stocks and bonds. In recent years, commercial real estate through real estate investment trusts (REITs) has been adopted as portfolio diversifiers as well.
While a broad REIT fund works well on this front, investors may be doing themselves a disservice by just thinking broad. Like the saying goes, it’s all about “location, location, location.” After all, not all real estate is the same. It turns out, property type matters when looking for true non-correlated returns.
Check out our dedicated page on REITs here.
