REIT share prices edged slightly higher last week with a total return of 0.1% on the FTSE Nareit All Equity REITs Index. Data centers, infrastructure, and self storage REIT sectors all had weekly returns exceeding 2.0%. On the down side, lodging/resorts, health care and retail REIT sectors all had declines exceeding 2.0%. Broader stock markets declined, with a -0.7% total return on the Russell 1000.
The volatility of daily stock price movements has continued to drift lower as the economic recovery has gained greater momentum. The standard deviation of REIT daily returns is at a pandemic low of 0.84%, after having been as high as 4.20% during June of last year (chart). Volatility has also subsided in broader markets, with the standard deviation of daily returns on the S&P 500 reaching new pandemic lows as well. As the economy and financial markets have stabilized, correlations between REIT stock price movements and the S&P 500 have declined, but remain somewhat higher than pre-pandemic levels.