It is no secret the homebuilder exchange traded funds (ETFs) and the sector have been battered. Could it be time for a re-model? The housing focused ETFs and REITs have had a bad year, and it could be the turning point in time where value oriented investors begin to pick up the pieces for the long term. Insiders believe that trying to pick up shares now and hope they’ll gain value isn’t a solid strategy, however, in 5-years they could definitely show improvement. John Spence for MarketWatch reports since the sector is upside down, and may not improve before the housing market turns, using index-linked ETFs are a good solution to single stock picking.
Consider the investment horizon to be at least several years. There is plenty of burden on these stocks such as falling home prices, lagging prices, mass inventory of homes for sale and credit/mortgage turmoil. Nonetheless, check out these ETFs and their year-to-date performance, not for the faint of heart:
- iShares Dow Jones U.S. Home Construction (ITB) down 55.1%
- SPDR S&P Homebuilders ETF (XHB) down 45.3%
- PowerShares Dynamic Building And Construction Portfolio (PKB) up 18%
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.