4 ETFs Hit By Falling Home Values

According to the S&P/Case-Shiller index of property values in 20 major cities, the housing sector continues to face headwinds and remains in a slump.

The index fell 3.6 percent from March 2010 to March 2011, marking the largest year-over-year decline since November 2009 and reached its weakest point since March 2003.  Furthermore, pending sales of previously owned homes dropped a whopping 12 percent in April from the prior month, forcing many home builders to be wary of when a recovery could be in sight.  Read more of this post

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4 Commercial Real Estate ETFs To Watch

As the US economy continues to show signs of improvement and corporate America is slowly starting to increase headcount, a ray of light may shine on the commercial real estate sector supporting the iShares Dow Jones US Real Estate (IYR), SPDR Dow Jones REIT (RWR), the Vanguard REIT Index ETF (VNQ) and the iShares Cohen & Steers Realty Majors (ICF). 

The first indicator that the sector is improving can be seen in the drop in U.S. office vacancies coupled with an increase in rents, in the most recent quarter.  This trend has not been seen in nearly three years.    More specifically, according to the property research firm, Reis Inc., the national vacancy rate fell to 17.5 percent in the first quarter of the year from 17.6 percent in the prior quarter, reports Bloomberg News.   Furthermore, office buildings gained a net 4.7 million square feet of occupied space during the quarter, while rents increased by $0.11 per square foot to $22.20 during the same time period.  Read more of this post

Four ETFs To Play Commercial Real Estate

Despite a stubbornly weak labor market and insignificant increases in consumer sentiment and spending, commercial real estate and the exchange traded funds (ETFs) which track the sector have fared relatively well this year and are expected to continue to do so.

Commercial real estate values appear to be stabilizing as rents are no longer falling, vacancies for apartment buildings, office buildings and retail malls are no longer rising.  A major driver behind this stabilization is improved credit markets, which have enabled many real estate investment trusts (REITs) to refinance debt and issue equity which can be used to pay down debt early or buy more properties at cheap valuations.  Read more of this post

Three REIT ETFs That Are Shining

As the residential real estate market continues to remain volatile and highly dependent on the strength of the labor force, some signs of prosperity have emerged in real estate investment trusts (REITs) enabling the iShares Dow Jones US Real Estate (IYR), the iShares Cohen & Steers Realty Major (ICF) and the Vanguard REIT ETF (VNQ) to perform relatively well this year. 

One reason these ETFs have been trending upward is because they offer an opportunity to debt that traditional financing institutions like banks and insurance companies are unwilling to take on.  Increases in foreclosures, a weak job market and other recessionary factors have put extreme pressure on income producing properties leading to increased stress on the loans that these properties support.  As a result, an opportunity has arisen for REITs to lend, either through debt or equity financing, to the owners of these income properties.  Read more of this post

ETFs Are Superior To Mutual Funds For Good Reason

With the plethora of investment tools at one’s hands and the concept of indexing flooding newswires, exchange traded funds and their counterparts are extremely attractive and for good reason.

An alert investment advisor has probably heard of ETFs but doesn’t really know what they offer.  In a nutshell, ETFs offer the ability to be traded intraday on an exchange, unlike traditional mutual funds which can only be bought and sold at the end of a trading day.  They give investors the ability to access hard to reach markets, like commodities, currencies, emerging markets and alternative asset classes.  Some common ETFs that are included in the aforementioned hard to reach markets include the US Oil Fund (USO), which gives exposure to crude oil without having to put up margin requirements, the CurrencyShares Japanese Yen Trust (FXY), the iShares MSCI Malaysia Index (EWM) and the iShares Dow Jones US Real Estate (IYR).    Read more of this post

Three Real Estate ETFs Worth A Look

Despite woes in residential real estate, the commercial real estate sector appears to be showing signs of stabilization shinning a light on the iShares Dow Jones US Real Estate (IYR), the Vanguard REIT ETF (VNQ) and the iShares Cohen & Steers Realty Majors (ICF) .

In the month of July, vacancies in apartment buildings, office complexes, retails malls and self-storage facilities showed no significant signs of rising indicating that the sector could be starting to stabilize.   In fact, occupancy rates for apartment buildings are currently around 92 percent and around 84 for office buildings, much higher than a year ago.  Additionally, rents on commercial properties are no longer falling and numerous real estate investment trusts, known as REITs, are reducing debt on their balance sheets. Read more of this post

The Many Benefits Of ETFs

One of the most favorable characteristics that ETFs have is their flexibility, or ability to be traded like stocks. 

This characteristic is beneficial because it enables an investor to get continuous intraday pricing and the ability to buy or sell a basket of securities through the trading day.  This further translates to pricing transparency, in that at any given time an investor knows exactly what the price of an ETF is.

Additionally, ETFs can be sold short, just like stocks.  This characteristic enables investors to bet against an entire sector, as opposed to just one stock.  For example, if an investor wants to bet against the financials, he can short the Financial Select SPDR (XLF) which will give him short positions in Bank Of America (BAC), JP Morgan Chase (JPM), Morgan Stanley (MS) and Wells Fargo (WFC) all in one trade; this will also reduce transaction costs. Read more of this post