Real estate stocks, including REITs, have significantly underperformed the S&P 500 over the past decade, mainly due to interest rates and the impact of COVID-19. Despite this, conditions are becoming more favorable for REIT outperformance. REITs tend to perform best in low-interest rate environments, and the commercial real estate sector was disproportionately affected by the pandemic. With interest rates expected to gradually trend lower over the next few years, now could be a good time to invest in REITs. The Vanguard Real Estate ETF, which offers exposure to about 150 REITs and has a 2.8% dividend yield, could be a solid addition to a portfolio.

Read more at Nasdaq: This ETF Has Underperformed the Stock Market For Years — But I Think That’s About to Change