Low Rates Can Keep Fueling This International Real Estate ETF

The Federal Reserve has been staunch with its stance to keep interest rates low for a couple more years. This is giving current and prospective real estate owners the chance to take advantage of low mortgage rates, boosting real estate ETFs like the Xtrackers International Real Estate ETF (HAUZ). The fund seeks investment results that correspond generally to the performance of the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index. iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index is a free-float capitalization-weighted index that provides exposure to publicly traded real estate securities in countries outside the United States, Pakistan, and Vietnam. HAUZ comes in at a 0.10% expense ratio. ETF investors get real estate exposure without the hassle of becoming a landlord, all in the convenience of an ETF wrapper. HAUZ Chart

The Fed Not Thinking About Raising Rates

The Fed’s commitment to keep rates low hasn’t been doing any wonders for bullish U.S. dollar investors. On the flip side, real estate investors have been delighted. Per a Forbes article, “News coming out of the Federal Reserve often goes pretty much unnoticed to everyone except professionals in economics, finance or real estate. As everyday Americans begin to consider how to plan for their financial futures in 2021 and beyond, a couple of recent moves at the Fed are worth a closer look.” “First, the Fed told us it was ‘not even thinking about thinking about raising rates,'” the article added. “Then, in September the Fed announced a near-zero policy through the end of 2023. The reason for this, it cites, is a goal of lowering unemployment. The Fed’s mission is to support full employment while controlling inflation. With the official U.S. unemployment tally coming in at more than 10 million (and some estimates as high as 30 million), the Fed has decided to prioritize job growth over inflation risk.” This, in turn, is helping to keep mortgage rates at basement-level lows. “Since the Fed funds rate plays a significant role in setting mortgage interest rates, the near-zero interest policy is paving the way for low mortgage rates for both primary residences that people live in and residential investment properties as well,” the article said. For more news and information, visit the Smart Beta Channel.