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Beginning today, real estate investment trusts (REITs) will be publicly traded as their own S&P 500 Index group.
According to a Finance & Commerce report, the new REIT group marks the first change to the S&P configurations in almost two decades. This change is a tribute to the viability of the 28 REITs within the S&P 500, which grew 360 percent within the S&P since March 2009—in comparison, the broader index gained 221 percent during the same period. The REITs total more than $580 billion in market value.
Absent from this new group, however, will be mortgage REITs (mREITS), which will remain under the S&P financial sector grouping. But even without mREITs in the mix, Howard Silverblatt, a senior index analyst at S&P, believes the new set-up is long overdue.
“The overall change, it’s an editorial comment to some degree,” he said. “It is a significant change in the culture of investing.”