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From Precy Dumlao, Opalesque Asia:

The Real Estate Investment Trusts (REITs)- focused Arcanum REIT Investment Fund gained a modest 0.63% in December and ended the year with 3.41% (78.08% since inception in March 2008) net returns, mainly because of the ultra low yields in the bond market that helped the REIT market generate some profits last year.

In its monthly report to investors, however, Arcanum admitted that the REIT market underperformed many commodities in 2010.

"While REITs gained 27.9% for the year, gold gained 29.5% and silver gained an impressive 83.5%. REITs strong performance and uptrend over the last 18 months can make it tempting to forget everything about hedging and jump into the market with a long only portfolio. However bond yields has starting to increase lately. The 10-year treasury has increase nearly 100-basis point over the last 3 months. REITs attractive valuation compare to bond prices does therefore no long exist and REITs still looks expensive compared to stocks. If further increases in interest rates should transpire, it will likely have an adverse impact on property and REIT values," the report said.

While being a good year for the REIT market, stock pickers had a difficult 2010.

Low volatility and higher correlation between related stocks made it more difficult to profit for price inefficiencies between stocks. This environment made 2010 a difficult year for market ......................

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