REITs originated in the US in 1960 and have spread worldwide. The Swiss equivalent is the listed real-estate fund (Swiss Real Estate Fund, SREF) and listed property companies like Swiss Prime Site, PSP and Allreal. Major US REITs include Prologis (logistics), American Tower (cell sites), Realty Income (net-lease retail) and Welltower (healthcare).
REITs combine three return drivers: rental income (the dividend), property appreciation (the share price), and skilled active management. Long-term total returns have averaged 9–11% per year in developed markets, roughly matching equities with lower drawdown correlation. They behave like a hybrid of stocks and bonds — sensitive to interest rates but with inflation-linked rents.
For a Swiss portfolio, a 5–15% allocation to a global REIT ETF (e.g. iShares Developed Markets Property Yield, TER 0.59%) provides diversified exposure to logistics, residential, retail, healthcare and data-centre real estate worldwide. Direct ownership of a single property is the opposite of diversification; REITs solve that problem at any portfolio size.
An investor holds CHF 15,000 of iShares Developed Markets Property Yield ETF (yield 3.8%, TER 0.59%). Annual dividend: CHF 570; price appreciation over 10 years averaged 4% per year, taking the position to roughly CHF 22,000 plus CHF 7,000 in cumulative dividends — a total return of nearly CHF 14,000.