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iEdge S-Reit Index Sees Remarkable Recovery in November with Highest Monthly Gains In Recent Years

If you are invested in S-REITs, you will probably be full of smiles these days. With many of them experiencing upside pressure, prices have climbed.

This is evidently clear with the iEdge S-Reit Index. It is regarded as Singapore’s S-REIT Benchmark and is a free-float market capitalization weighted index that measures the performance of real estate investment trusts in Singapore.

S REITs rebounded in Nov 2023

We can see the rebound happen in this one year chart after a notable period of decline. This significant recovery of a 7.4% total return, erased the 7.0% drop encountered in October, trimming the year-to-date loss of the benchmark from nearly 10% down to just over 2% at the end of November. It comes as no surprise that November clocks the highest monthly total return gains for the Index since November 2020.

Why is this happening?

Markets may be reacting to indications of a possible end of interest rate hikes from the US Federal Reserve. Trends observed in many major REITs markets show similar positive upside moves. A number of analysts are predicting that interest rate cuts may happen earlier due to recent dovish data.

Having said so, I prefer to approach this in a more measured manner as the US Federal Reserve has on the other hand often made it clear that it stands ready to hike interest rate further if the economic situation calls for it.

A prudent long-term approach is inline with my strategy of long-term free coffees from dividends. I remain ready to commit more funds at the right opportunities. As the wise saying goes, nothing moves in a straight line.

Even if the price action continues to be green, we are still mostly in the “cheap valuation” zone as many S-REITs NAVs are higher than current stock prices.

NAV stands for net asset value. If you buy at a price below it, for example, a stock of $1.8 versus a NAV of $2, you are technically getting a discount of 10%.

By the way, I received a dividend of $373.96 from Mapletree Ind Tr! So happy I can go for more coffees now 😛

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