Slow job growth, tapped-out consumers and low home prices are influencing home-related exchange traded funds (ETFs). The SPDR S&P Homebuilders (XHB) has lost 21% year-to-date. Holdings include D R Horton (DHI), Home Depot (HD), Lennar (LEN), Pulte Homes (PHM) and Sherwin Williams (SHW), ETF Guide reports. In fact, Home Depot announced today that it was cooling its earning expectations for the year partly because of the weak housing market.
Real estate nationwide is suffering a similar slump partly because of declining home values. So, it’s no surprise that the Vanguard REIT ETF (VNQ) is down as well. VNQ is down 5.5% year-to-date. Similarly, iShares Dow Jones U.S. Real Estate Index Fund (IYR) is down 5.0%.
Don’t despair just yet: Bucking the downward trends include PowerShares Dynamic Building Construction Portfolio (PKB) and SPDR DJ Wilshire International Real Estate ETF (RWX). PKB uses a quantitative strategy, which could account for it’s high performance; it’s up 25.4% for the year. RWX is up 3.6% year-to-date.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.