iShares Core US REIT ETF

USRT

Market cap $3.67B

Real estate has historically kept pace with inflation because landlords can raise rents as prices climb, passing cost increases directly to tenants.

After a solid January performance, the REIT sector recovery gained steam in February with a stronger +3.70% return. Large cap REITs (+5.80%) led the REIT sector in February with strong gains from mid caps (+5.26%) and small caps (+4.94%). Micro caps (-6.12%) badly underperformed again in February. 71.71% of REIT securities had a positive total return in February.

REIT ETFs, like SCHH, are in focus after the 30-year mortgage rate dipped to 5.98%, boosting real estate valuations and dividend appeal.

The REIT sector rebounded from a rough 2025 (-3.57%) by starting off 2026 in the black (+1.09%). Small-cap REITs (+3.27%) outperformed in January, followed by solid gains from mid-caps (+2.65%) and large caps (+2.35%). Microcaps, however, had a dismal start to the year with. 63.46% of REIT securities had a positive total return in January.

The REIT sector closed out 2025 with a tough December (-1.48%) and finishing the year with a -3.57% total return for 2025. Small caps (+0.51%) eked out a small gain in December, while mid caps (-1.77%), large caps (-2.55%) and micro caps (-3.88%) fell at the close of the year. 42.04% of REIT securities had a positive total return in December with only 38.36% in the black for the full year.

Everything says REITs should be soaring — but they aren't. A hidden headwind is quietly holding returns back. One overlooked niche is where I am pouring my REIT capital.

The REIT sector returned to positive territory in November (+1.02%) after back-to-back months in the red. Mid caps (+3.53%) led the REIT sector in November followed by small caps (+3.38%) and large caps (+0.32%); micro caps (-8.76%) badly underperformed. 68.15% of REIT securities had a positive total return in November.

Year-to-date returns across the REIT market varied remarkably, with large gains from non-U.S. REITs and U.S. healthcare REITs, while U.S. residential and data center sectors were notable laggards. In the last three years, there have been two major forces impacting the performance of equity markets and real estate. Today's public REIT market looks a lot different than what most investors expect. Sectors previously considered niche have grown to be essential in today's economy and society.

The REIT sector has seen back-to-back tough months as it saw a modest average negative total return in September (-0.73%) and fell deeper into the red in October (-4.03%). Small cap REITs (-5.05%) had the worst performance in October. Micro caps (-2.81%), mid caps (-3.11%) and large caps (-4.45%) were also in negative territory albeit to a smaller degree. Only 21.66% of REIT securities had a positive total return in October.

After a strong August, REITs faded slightly in September (-0.73%), pulling the REIT sector's year-to-date average total return down to (-1.74%). Mid-cap REITs (-0.92%) averaged the lowest total return in September. Large caps (-0.29%), micro caps (-0.79%), and small caps (-0.83%) averaged modestly smaller declines. Only 37.4% of REIT securities had a positive total return in September.