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U.S. REIT ETF (USRT) Hits a New 52-Week High

Sweta Jaiswal, FRM

For investors seeking momentum, iShares Core U.S. REIT ETF USRT is probably a suitable pick. The fund just hit a 52-week high, up roughly 29.6% from its 52-week low of $42.78/share.

But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

USRT in Focus

The fund provides exposure to diversified U.S. real estate investment trusts (REITs) at both a broad industry-wide level and on a sector-by-sector basis. USRT tracks the investment results of the FTSE Nareit Equity REITS Index which is made up of U.S. real estate equities. USRT is charging 8 bps in fees. The fund has amassed $1.64 billion in AUM.

Why the Move?

The Fed has cut interest rate for the first time since 2008 at the FOMC meeting in July 2019. When interest rate drops, mortgage rates fall, making real estate or refinancing mortgages more affordable. This in turn results in higher real estate sales. Further, uncertainty in market conditions due to geo-political tensions, slowdown in the global economy and Brexit woes are making investors jittery, adding to the lure of these funds. This is because these funds offer outsized yields and act as good investing options when increased safe-haven trade keeps yields at check.

More Gains Ahead?

Currently, USRT has a Zacks Rank #3 (Hold) making it hard to get a handle on the fund’s future returns. However, it seems USRT might remain strong given a positive weighted alpha of 13.58.

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iShares Core U.S. REIT ETF (USRT): ETF Research Reports
 
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