REITs are Outperforming Because of This, Goldman Sachs Explains

REITs are up 8.82% this year, outperforming the S&P by 822 basis points. Goldman Sachs analyst Andrew Rosivach said while rates and fund flows are two commonly used explanations for the outperformance, he said they lack merit. The firm's analysis shows interest rates have been a poor historical determinant of REIT relative performance, while fund flows have only been marginally positive. In the firm's view the more useful reason for this year's REIT outperformance is lower equity issuance.

The analyst notes only $1.9 billion of equity has been raised year to date versus $41.4 billion in full-year 2013.

Related ETFs: Vanguard REIT Index ETF (NYSE: VNQ), SPDR Dow Jones REIT ETF (NYSE: RWR) .

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