REITs Outperform S&P 500 for Fourth Straight Year

Almost all sectors of the REIT market delivered double-digit returns for the year, the organization reports. Among equity REITs, the top-performing sectors in 2012 were

• Timber, with a 37.05% total return; 
• Industrial, with a 31.28% total return;
• Infrastructure, with a 29.91% return;
• The retail sector, which delivered a 26.74% total return, led by the regional mall segment's 28.21% return; and
• The health care sector returned 20.35% for the year, and self-storage achieved a 19.94% return.

 The FTSE NAREIT Mortgage REITs Index provided a 19.89% total return for 2012. The commercial financing sector's total return was 42.98%, and the home financing sector returned 16.38%.

REITs are required to pay out nearly all of their taxable income to shareholders as dividends annually, typically resulting in significant dividend yields for the stocks. The dividend yield of the FTSE NAREIT All REITs Index was 4.38% on Dec. 31, and the dividend yield of the FTSE NAREIT All Equity REITs Index was 3.51%.

"REITs have a strong track record of delivering income," NAREIT President and CEO Steven Wechsler said in a statement. "It is an attribute that has become increasingly important in our continuing low-interest-rate environment, especially for those who are preparing for or are in their retirement years."

Read Why REITS Have Been on a Tear on AdvisorOne.