President Donald Trump’s pick for Federal Reserve Chair, Kevin Warsh, aligns with Trump’s calls for lower interest rates. Traders predict an 81% chance of a rate cut by summer, with a 45% chance in April before Warsh takes office. This could benefit real estate investment trusts (REITs) with lower borrowing costs.

REITs pay 90% of their net income back to shareholders as dividends, offering high yields that attract income investors. Lower interest rates boost REIT valuations, as their future cash flows are discounted using the 10-year Treasury yield benchmark. The Vanguard Real Estate Index Fund ETF has historically outperformed the S&P 500 during prolonged low rates.

Realty Income (NYSE: O) is a top REIT globally, with a long history of dividend increases and high yields. Prologis (NYSE: PLD) operates in 20 countries with strong dividend growth. The Vanguard Real Estate Index Fund ETF provides broad exposure to the REIT industry, offering high income and moderate capital appreciation.

Investors seeking income and stability amid lower rates may find opportunities in REITs. Before investing in Vanguard Real Estate ETF, consider the top 10 stocks recommended by the Motley Fool Stock Advisor team for potential monster returns. The ETF has a history of outperforming in low-rate environments, offering a yield of 3.82% and a low expense ratio.

Read more at Yahoo Finance: 3 REITs to Buy Before President Trump’s New Fed Chair Cuts Interest Rates