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Small-Cap Real Estate ETF (ROOF) Hits New 52-Week High

Sanghamitra Saha

For investors seeking momentum, IQ US Real Estate Small Cap ETF ROOF is probably on radar now. The fund just hit a 52-week high, and is up over 33.3% from its 52-week low price of $20.69 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

ROOF in Focus    

ROOF focuses on the real estate segment of the U.S. market. The fund has a small cap focus and charges investors 69 basis points a year in fees and has top holdings in First Industrial Realty Trust, Education Realty Trust and Brandywine Realty Trust (see all Real Estate ETFs here).

Why the Move?

As long-term U.S. Treasury yields are toying with record-low levels and the economy is gathering steam, this could be the right time to play a real estate ETF with a small-cap focus. Investors should note that real-estate ETFs are rate-sensitive and perform well in a low-rate environment.

The U.S. benchmark Treasury yields fell below 1.50% on July 13, 2016, pushing the drive for higher income. As a result, juicy yields over 5% offered by this small-cap real estate ETF attract investors to this product.

More Gains Ahead?

ROOF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Also, the fund has a positive weighted alpha of 11.70. Since a positive weighted alpha hints at more gains, it seems that this fund can be exercised a little further.

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IQ-US RE SC (ROOF): ETF Research Reports
 
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