Given our highlighting of two prominent REIT based ETFs last Friday, IYR (iShares DJ U.S. REIT) and VNQ (Vanguard REIT) and related asset inflows as of late, we have the opportunity today to feature another ETF in the broader REIT sector that has caught some attention recently.
REM (iShares FTSE NAREIT Mortgage Plus Capped Index) is not as well known as IYR and VNQ having debuted in 2007, but the fund has quietly raised approximately $900 million in AUM and averaged more than 960,000 shares currently in daily trading volume.
Unlike IYR and VNQ, REM is concentrated in the Mortgage REIT sub-sector, and holds names including NLY (20.20%), AGNC (18.06%), TWO (5.52%), CYS (4.73%), and ARR (4.54%) in its top five weightings currently (29 holdings overall in the fund).
Clearly, REM has been positively impacted by the Fed’s QE3 announcement, as has related ETF in the mortgage space, MBB (iShares Barclays MBS Bond) and many of the underlying stocks in REM have bounced considerably and on short notice.