The SPDR S&P Homebuilders ETF (NYSEArca: XHB) fell nearly 1% last week amid fears that Amazon.com Inc. (NASDAQ: AMZN) could encroach upon the home appliance market currently dominated by the likes of Dow component Home Depot (NYSE: HD) and Lowe’s Companies Inc. (NYSE: LOW).
Some market observers believe investors should not rush to part ways with homebuilders stocks and ETFs even amid competitive threats on the retail side of the home furnishings business.
XHB’s well-known rival is the iShares U.S. Home Construction ETF (NYSEArca: ITB). The equal-weight XHB mixes stocks such as Tempur Sealy (NYSE: TPX), Williams-Sonoma (NYSE: WSM) and Restoration Hardware (NYSE: RH) with pure play homebuilders such as Lennar (NYSE: LEN) and Toll Brothers (NYSE: TOLL) among others.
ITB tracks the Dow Jones U.S. Select Home Construction Index while XHB follows the S&P Homebuilders Select Industry Index.
“Matt Maley, equity strategist at Miller Tabak, is watching homebuilder stocks closely following Wednesday’s U.S. housing starts data, showing that housing starts rose 8.3 percent to a seasonally adjusted annual rate of 1.22 million units, versus 1.16 million units expected,” reports CNBC.