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Review of REIT and MBS

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Encyclopedia of Finance

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Abstract

In this chapter the history and the success of Real Estate Investment Trusts (REITs) and Mortgage-Backed Securities (MBS) in the US financial market are discussed. REITs had both great losses during financial crisis of 2008–2009 and the COVID-19 pandemic of 2020. They enhanced their financial positions after the financial crisis and their leverage ratios at the lowest records before near the pandemic. REITs have had a partial recovery at the end of 2020 and are more likely to recover in 2022. Both REITs and MBS are derived from real estate-related assets and are able to increase the liquidity on real estate investment. They also provide investors with the opportunity to diversify portfolios because real estate assets are relatively less volatile and less correlated to existing investment instruments. Therefore, REITs and MBS enhance the width and the depth of the financial market.

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Abbreviations

COVID-19:

coronavirus disease 2019

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Author information

Authors and Affiliations

  1. Department of International Business, National Taiwan University, Taipei, Taiwan

    Chiuling Lu

  2. Department of Accounting, Feng Chia University, Taichung, Taiwan

    Chou-Yen Wu

Authors
  1. Chiuling Lu
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  2. Chou-Yen Wu
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Corresponding author

Correspondence to Chiuling Lu .

Editor information

Editors and Affiliations

  1. Department of Finance & Economics, Rutgers University, Piscataway, NJ, USA

    Cheng-Few Lee

  2. Center for PBBEF Research, Phoenix, AZ, USA

    Alice C. Lee

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Lu, C., Wu, CY. (2022). Review of REIT and MBS. In: Lee, CF., Lee, A.C. (eds) Encyclopedia of Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-91231-4_26

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