I called non-propotional imbalance, as per the recovery of the economy is coming, URE will upset SRS, is non -prop fashion, one day URE may open 2 or 3 bucks up and SRS will be down only 44 cents. Soon we will be talking about the URE crossing with SRS at 8.56. cheers! Super.
The managers try to keep the NAV equal to the index value, but they can't do this in real-time. There are huge blocks being traded right now (600k on the bid, 200k on the ask). When huge blocks like this are being traded, simple supply and demand trump NAV.
In the long run, the managers should correct by adjusting the NAV to reflect the goals, but in the short run, what it means is people are starting to believe we are at the bottom and want in on the real-estate momentum that's been building. And more buyers are coming from non-corelated assets (stocks) than are coming from the otherside of the trade (short real estate).
There may have been a slight downturn in real estate valuation that is already reflected in SRS's NAV, but the belief in the bottom still drived buyers to URE and both prices go up.
But this is a short term phenomenon. Eventually the NAVs alone will dictate the level of demand, and therefore indirectly control the prices.