REITs Achieve New Sector Status in the Investment Marketplace

Real estate has long been recognized as a diversification vehicle within investment portfolios and often is held in one of two ways: physical real estate and Real Estate Investment Trusts (REITs). Although REITs were first created in the early 1960s and have played a notable role for investors since the 1990s, they have not always been a requirement within portfolios for traditional equity investment managers. This will change on August 31, 2016 when Real Estate (including REITs) becomes its own sector within the Global Industry Classification Standard (GICS), the universally accepted method for classifying stocks. This is a significant change that will likely have an impact on the demand for REIT equities moving forward.