Unfortunate timing has hit the exchange traded fund (ETF) iShares FTSE NAREIT Mortgage REITs (REM) hard. This ETF was designed to track REITs that specialize in residential and commercial loans and was launched by Barclays Global Investors on May 4. This time frame is right before the subprime concerns came to the forefront of everyone’s attention around mid-to-late July. REM reached a high of $51.06 on June 4th, but by August it had lost 40%, reports John Spence for MarketWatch. As of late last week it was off 28.3% for the month, which made it the biggest decliner among all U.S.-listed ETFs. It’s down about 10.1% today.
However, other REIT ETFs such as iShares Dow Jones U.S. Real Estate (IYR) and iShares Cohen & Steers Realty Majors (ICF) remained steady at the end of last week, possibly in response to the Federal Reserve’s money injection into the U.S. banking system.
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.