Buoyed by ongoing declines, real estate investment trust (REIT) exchange traded funds have continued impressing in 2015 as the Vanguard REIT ETF (NYSEArca: VNQ) and the iShares Dow Jones US Real Estate Index Fund (NYSEArca: IYR) are up an average of 6%.
REITs and the aforementioned ETFs are sensitive to changes in interest rates, meaning the asset class’ performance is often seen as one gauge of investors’ expectations of Federal Reserve action. Some may be concerned that REITs are sensitive to changes in interest rates. Notably, the fall in interest rates have made the asset more attractive as a yield-generating alternative, but some fear the asset will fall out of favor once rates rise. [REIT ETFs Keep Soaring]
To that end, IYR’s charts merit immediate attention.
“The Power of the Pattern reflects that IYR is at the top of a long-term trend channel and the top of a steep short-term rising channel. IYR was hitting both of them at the same time recently. Now IYR could be breaking support of its steep rising channel. What IYR does in the near future could be very important to several areas of the markets,” according to Chris Kimble of Kimble Charting Solutions.
IYR recently fell below its 20-day moving average, but the ETF resides nearly 12% above its 200-day line and just 3.1% away from its recently touched 52-week high. With that, some analysts see a strong fundamental case to be long REITs and the relevant ETFs. [More Upside for a Big REIT ETF]