Singapore REITs Sector (S-REIT ETF) Poised for Rebound as Rate Outlook Turns Supportive
The latest technical breakout in the CSOP iEdge S-REIT ETF (SGX: SRT) presents a opportunity for investors watching the real estate investment trust (REIT) space. Following months of weakness, SRT has decisively broken above its downward trend channel — a signal that the worst may be behind us, at least in the short term.
This technical breakout aligns with a fundamental catalyst: the evolving interest rate expectations in the US. According to the CME FedWatch Tool, market participants now overwhelmingly expect the Federal Reserve to begin easing rates later this year, with the majority projecting the Fed Funds rate to fall into the 375–400 bps or even lower ranges by Q4 2025. Lower interest rates tend to benefit REITs, as borrowing costs decline and the yield spread versus other income assets becomes more attractive.
Technical Setup: Breakout From the Downtrend
After trading within a well-defined downward channel since October 2024, the SRT ETF has recently pushed above this channel resistance. This move is often an early indication of trend reversal or, at minimum, a relief rally.
With price currently hovering around 0.729, the first upside target lies in the 0.76–0.78 zone, which coincides with a confluence of previous support-turned-resistance and the 50–61.8% Fibonacci retracement levels. A more extended move could bring the ETF toward the next target around 0.84, the previous swing high from late September 2024.
Risk Management
To manage downside risk, a stop-loss just below the recent low and lower boundary of the trend channel — around 0.69 — is appropriate. This setup offers a favourable risk-reward ratio for short- to medium-term investors looking to position ahead of the expected rate cut cycle.
Conclusion
With macro tailwinds from a potentially more dovish Fed and technical confirmation from a breakout above the trend channel, the S-REIT ETF looks set for a recovery. While headwinds may persist in the broader market, this could be an early signal for sector rotation back into yield-sensitive assets like REITs.
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