REITs have seen some short term heavier outflows in what appears to be post FOMC triggered selling, with IYR (iShares U.S. Real Estate, Expense Ratio 0.46%) losing more than $500 million in recent sessions.
We keep in mind that the fund still has north of $5.4 billion in AUM, but the timing of the selling given the FOMC rate decision and commentary yesterday is especially notable. Like many “yield” oriented stocks, REITs have rallied sharply from the early October lows, almost behaving like a defensive sector in some cases (driving IYR’s yield down to 3.74%).
IYR is actually the second largest fund in the space, with VNQ (Vanguard REIT, Expense Ratio 0.10%) standing at north of $25 billion in assets under management. VNQ like IYR has staged an impressive rally lately, and has actually seen some assets trickle in lately (+>$145 million).
Several other REIT funds which are of course rate sensitive by nature that have substantial asset bases that should be monitored here as well include ICF (iShares Cohen & Steers Realty Majors, Expense Ratio 0.35%), RWR (SPDR DJ REIT, Expense Ratio 0.25%) which have $3 billion and $2.8 billion in AUM respectively.
REM (iShares FTSE NAREIT Residential, Expense Ratio 0.48%) and SCHH (Schwab U.S. REIT, Expense Ratio 0.07%) both have more than $1 billion in AUM as well, so one can see that the U.S. REIT space is rather robust in terms of investment interest out there among advisors and institutions.
There are several other notable, targeted, but smaller ETF strategies in the marketplace here as well, that hone in on specific corners of REIT markets instead of taking the broad based index approach. We always watch DRN (Direxion Daily Real Estate Bull 3X Shares, Expense Ratio 0.95%) and DRV (Direxion Daily Real Estate, Bear 3X Shares, Expense Ratio 0.95%).