If you knew nothing about real estate investment trusts ("REITs") except their stock prices, you would assume they are bad businesses in a bad industry. Since interest rates and bond yields began trending higher in early 2022, REITs (VNQ) have underperformed the S&P 500 (SPY) on a price basis by about 36%. Given how top-heavy the SPY has become, with mega-cap stocks dominating the index weighting and overall market performance, it isn't surprising that most sectors of the market have underperformed the cap-weighted index. That is because the market treats REITs as little more than bond proxies.