You are on the Investment solutions website for advisors & wealth management firms.
Browse more Fidelity websites here.
Your browser doesn’t support video.
Video
Income-generating real estate opportunities
Hear how portfolio manager Bill Maclay looks for income from a combination of bond and non-bond sources that offer attractive yields and less sensitivity to interest rates.
Key Takeaways
- As portfolio manager of Fidelity Real Estate Income, Bill Maclay actively invests in a full spectrum of income-oriented real estate assets, including REIT common stock, REIT preferred stock, real estate company bonds, and commercial mortgage-backed securities.
- The benefits of a diversified real estate income portfolio are: 1) it may provide a higher yield, a similar return profile and lower volatility than investing in a portfolio of only REIT common stocks, and 2) it may offer a higher yield with less interest rate sensitivity compared to investing in only investment-grade bonds.
- Recently, Bill has emphasized senior housing REITs in the portfolio because over the next decade there is a demographic tailwind of aging baby boomers over 80 years old that will result in increased demand.
- Bill also has sizable positions in data-center REITs because they are the backbone infrastructure for the build-out of artificial intelligence capabilities and there isn't enough capacity to meet current and future expected demand.
- From an asset allocation perspective, Bill has positioned the portfolio with an overweight in real estate bonds and less preferred and common stocks, and he has increased the fund's emphasis on quality − meaning property types he believes have durable cash flows.
Learn more about Fidelity's income strategies managed by our featured speaker.
Fidelity Real Estate Income Fund FRIFX
A fund for investors seeking income and capital growth.
Learn more
Fidelity Advisor Real Estate Income Fund FRIRX
A fund for investors seeking income and capital growth.
Learn more
Fidelity Real Estate Income ETF: FREI
A fund for investors seeking income and capital growth.
Learn more
Related insights
View all
Investing Ideas
Emerging opportunities in real estate debt
Commercial real estate fundamentals look healthy outside of the office sector while sentiment has been improving.
Series
Fixed Income Insights: Monthly commentary
This commentary explores the current state of the U.S. economic and Treasury markets, shares insights on the yield curve, and provides a detailed review of the investment-grade and high-yield sectors.
Investing Ideas
Subordinate debt and the new era of real estate investing
Strong fundamentals, constrained bank lending, and reset property values have created opportunities for private credit investors
Views expressed are as of the data indicated, based on the information available at that time, and may change based on the market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
1220493.2
1EF782DC0BDD48118639AEE1CBD856D4