Social distancing amid the Covid-19 pandemic certainly changed the landscape of real estate. While more businesses are utilizing their offices less with employees working from home, an unforeseen boom in housing is helping to boost the sector and real estate-focused exchange-traded funds (ETFs).
“Just six months ago, the idea of a housing boom would have seemed ridiculous as millions of Americans were losing their jobs,” an Investor’s Business Daily article noted. “But low interest rates and the work-from-home trend are stoking real estate stocks and home sales in smaller housing markets. The flip side is that once-sky-high markets have come crashing down, especially in the San Francisco Bay Area. But overall, both new and existing-home sales have reached levels last seen before the Great Recession.”
This is helping to boost homebuilder confidence, which is helping to fuel funds like the SPDR S&P Homebuilders ETF (XHB ), which is up 26.09% thus far this year according to Yahoo Finance performance numbers.
XHB seeks to provide investment results that correspond generally to the total return performance of an index derived from the homebuilding segment of a U.S. total market composite index. In order to track the performance of the S&P Homebuilders Select Industry Index, the fund employs a sampling strategy.
Another real estate fund to look at is the FlexShares Global Quality Real Estate Index Fund (GQRE ). The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Global Quality Real Estate IndexSM. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
Another fund to check out is the Xtrackers International Real Estate ETF (HAUZ ), which seeks investment results that correspond generally to the performance of the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index. iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index is a free-float capitalization-weighted index that provides exposure to publicly traded real estate securities in countries outside the United States, Pakistan, and Vietnam.
One more fund to look at is the Vanguard Real Estate ETF (VNQ ). VNQ seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments.