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ETF Chart of the Day: REITs


IYR (iShares DJ U.S. REIT, Expense Ratio 0.48%) has seen an uptick in options volume in recent days as it appears that institutional holders are hedging against a potential reversal as the sector continues to hit multi-year highs.

The fund is the second largest in terms of assets under management in the Real Estate ETF space, accumulating $5.2 billion and about $200 million in new assets YTD. VNQ (Vanguard REIT, Expense Ratio 0.10%) remains the largest in terms of AUM, with approximately $17.7 billion in AUM and also has had success in attracting new assets, taking in more than $300 million just this week and $1.3 billion YTD.

Both of these ETFs attempt to measure the U.S. Real Estate market, with exposure to REIT segments including Retail, Specialty, Industrial and Office, Mortgage, Diversified, and Hotel & Lodging REITs as well as Real Estate Servicing names. [Vanguard REIT ETF]

The investor will note overlap in terms of top holdings in both of these ETFs including names like SPG, PSA, HCP, VTR, and EQR for example, and we have to think that like Utilities (which we mentioned yesterday), the REIT sector continues to participate in strong price action and inflows at least partially due to the quest for yield (IYR Yield 3.52%, VNQ 3.39%) that continues to pervade in the marketplace.

As these two ETF giants in the REIT space continue to garner attention, it is also important to highlight some perhaps lesser known alternatives that typically trade much less volume than IYR and VNQ, including ICF (iShares Cohen & Steers Realty Majors, Expense Ratio 0.35%), RWR (SPDR DJ REIT, Expense Ratio 0.25%), REM (iShares FTSE NAREIT Mortgage REIT, Expense Ratio 0.48%), SCHH (Schwab U.S. REIT, Expense Ratio 0.07%), and FRI (First Trust S&P REIT, Expense Ratio 0.50%) to name a few, while there are currently seventeen ETFs classified in the REIT category.

iShares DJ U.S. REIT


For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.