Can REITs provide diversification benefits to a portfolio?

Yes, REITs can provide diversification benefits to a portfolio. They offer exposure to the real estate sector which has historically had a low correlation to stocks and bonds, meaning that their returns do not necessarily move in the same direction as the broader market. By adding REITs to a portfolio, investors can potentially reduce overall portfolio risk and increase returns. Additionally, REITs can provide exposure to different types of real estate, such as residential, commercial, industrial, and healthcare, which can further diversify an investor's portfolio. However, it is important to note that REITs are not immune to market fluctuations and do carry risks, so investors should carefully consider their individual investment objectives and risk tolerance before investing in them.