Researching an ETFEnter the ETF's ticker symbol in the Hannon Armstrong Sustainable Infrastructure Capital, Inc. Apollo Commercial Real Estate Finance, Inc. First, its 0.43% MER is still on the high side, and investors arent getting any more bang for their buck: over the past 10 years, the fund has posted a total return of 50%, far below the next pick Im going to tell you about. Supreme Court ruling on student debt will devastate millions of borrowers. The ETF's price has gained 9.26% in the last 12 months and, therefore, medium-term chart watchers may find it an attractive proposition (TTM dividend yield of 7.22% plus the price gain). China is facing an economic crisis after a real estate boom ended with a bang last year, according to investor George Soros. it provides high dividend income and good diversification. First, a little bit more about my overall portfolio management strategy. Wall Street experts differ in their outlooks for America's housing market. Wharton professor Jeremy Siegel, real estate tycoon Jeff Greene, and others have warned that home prices will drop, while ot Top Performing Unleveraged ETFs Last Week These were last week's top-performing ETFs. Scroll down to the question that interests you the most. As a result, a contrarian trade was, and may still be, the way to go. The method improved the maximum drawdown by up to 10% at the worst of the times in the past. iShares Trust - iShares Mortgage Real Estate ETF is an exchange traded fund launched by BlackRock, Inc. While the S&P tanks, theres a massive stealth bull market unfolding as the Baby Boom generation gets older. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Exposure to the U.S. residential and commercial mortgage real estate sectors 2. The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE NAREIT Mortgage REITs Index. The iShares Mortgage Real Estate ETF (REM) is an exchange-traded fund that is based on the FTSE Nareit All Mortgage Capped index, a market-cap-weighted index of residential and commercial mortgage REITs. My last article provided a close look at the iShares Mortgage Real Estate Capped ETF (BATS:REM). Two reasons. The REM provided consistently higher dividend income relative to the overall US market (represented by SPY) since its inception in 2008. Subscriber Agreement & Terms of Use | What Happened: Redfin noted the sp Adena Hefets, Divvy Homes Co-Founder and CEO joins the Yahoo Finance's Akiko Fujita to discuss Divvy Homes, a property-technology startup buys homes on behalf of renters and helps them become owners. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Under normal market conditions, the fund generally invests . Use to diversify your portfolio and express a view on a specific U.S. real estate sector beyond what you can find in its prospectus, and on Morningstar or Yahoo As seen, REMs top holdings are all REIT companies that hold U.S. residential and commercial mortgages. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. SPAC ETFs are a new investment tool for investors to access the entire IPO market. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. What are (0.48% vs %). Please disable your ad-blocker and refresh. The fund holds 119 REITs, with the top 10 representing 36% of its portfolio. Beta N/A. If you want to generate income from high-yielding stocks without drastically increasing your risk, you may want to consider a mortgage real estate investment trust (REIT) exchange-traded fund. I am not receiving compensation for it (other than from Seeking Alpha). Start your FREE trial, Some content on this tab for Individual & Professional subscribers only. comparison details. Dividend yield: 10.6%. Their profits come from the spread between the rates they pay out on the money they borrow and the interest income on their mortgages. Analysis: REM buy or sell; the pros and cons of investing in REM ETF; Alternatives: other ETFs and mutual funds you should consider as alternatives to REM . (-4.22% vs 0.57%). Historical and current end-of-day data provided by FACTSET. Thx for reading and look forward to your comments! Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Compare fees, performance, dividend yield, holdings, technical indicators, and many other metrics to make a better investment decision. In the remainder of this article, I will examine the root of the volatility risk and describe some methods to hedge it. The drawbacks? Content on this tab for Individual & Professional subscribers only. To start off, here's a look at the basics of each fund. These market conditions suggest that 2022 and beyond are not likely to witness an extraordinary demand for homes like in 2020-21. iShares Mortgage Real Estate Capped ETF($REM). Call it a late realization that the rate liftoff is mostly a non-event for REITs. 19 days ago - Wall Street is divided on the outlook for US house prices.Here's what 6 experts have recently said. The ETF makes the cut for long-term income investors who are happy with inflation-beating returns. It provides a high dividend income. We provide a platform for our authors to report on investments fairly, accurately, and from the investors point of view. The next chart shows that the REM fund not only lagged in total return but also has suffered greater volatility. However, the good news is that the real estate sector, in general, shows a low correlation relative to other asset classes. Finally, this article describes some methods based on risk-parity and diversification to hedge such risks. Is this happening to you frequently? This article takes a closer look at REM in terms of growth, income, inflation, volatility to further examine its pros and cons. All leveraged ETPs are ineligible for use of day trading buying power. Assets under management. The monthly returns are then compounded to arrive at the annual return. Nasdaq Futures 15055.75 -55.75 (-0.37%) Dow Jones Futures 34162.00 -21.00 (-0.06%) S&P 500 Futures 4409.75 -9.00 (-0.20%) EUR/USD 1.09 -0.00 (-0.12%) GBP/USD 1.27 -0.00 (-0.19%) USD/JPY 144.01 -0.01 (-0.01%) Bitcoin USD 30474.63 132.54 (0.44%) Crude Oil 67.90 0.20 (0.30%) Gold 1924.30 0.50 (0.03%) Use to diversify your portfolio and express a view on a specific U.S. real estate sector An easy way to get into the sector is through REIT-focused exchange traded funds. Since dividend ETFs and . Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Current performance may be lower or higher than the performance quoted. Finding & Comparing ETFsExplore the other tools What is As can be seen from the chart below, REM features a relatively low correlation of about 0.63 relative to the overall US stock market. I am not receiving compensation for it (other than from Seeking Alpha). And the central idea in my asset allocation is diversification. I love three REITs focused on the healthcare sector in particular, as theyre benefiting from one of the biggest demographic shifts in history. Lastly, as can be seen from the second chart below, the addition of bonds and gold did not significantly reduce the dividend income either. Lead-Lag Publishing, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing. Key Takeaways. Home wasn't built in a day. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Zacks proprietary quantitative models divide each set of ETFs following a similar investment strategy (style box/industry/asset class) into three risk categories . To be fair, REM IPOd at $200/share in 2007 ouch. Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity, The Biden administration has a new strategy for student-loan forgiveness but there are risks it could meet the same fate. This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Of course, there's the caveat that some pent-up demand may be unleashed sporadically. Finny Score is 0. Contact UsFor additional help contact us at: +1.646.435.0569 For the best MarketWatch.com experience, please update to a modern browser. Don't Miss: Valley of Hype: The Culture That Built Elizabeth Yahoo Finance's Alexis Christoforous speaks with CFRA Research's Ken Leon to discuss housing market trends and the the outlook for 2022. Privacy Notice Updated| Certain ETFs will not be immediately marginable at TD Ameritrade through the first 30 days from settlement. The above performance and volatility are rooted in REMs fundamental indexing method, as can be seen from the chart below. REM - iShares Mortgage Real Estate Capped ETF - Check REM price, review total assets, see historical growth, and review the analyst rating from Morningstar. Portfolio 2: 90% REM+ 10% TLT with a quarterly rebalance, Portfolio 3: 80% REM+ 10% TLT + 10% GLD with a quarterly rebalance. We've excluded funds that use leverage or make inverse bets on their underlying assets. Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. NYSE and AMEX data is at least 20 minutes delayed. Log in to see them here or sign up to get started. But the reduced volatility is more important for conservative investors like myself. With that said, here is my review of REM's prospects: Image Source: My Tweet/The Lead-Lag Report. Because even if the Fed follows through on its plan to raise rates this year (a big if in light of the wavering global economy and cowed US inflation), youll still be waiting a very long time for safer vehicles like Treasuries to play in the same league as REITs throwing off yields of 6% or more. That's. How we use your information depends on the product and service that you use and your relationship with us. The U.S. real estate sector has been under pressure amid the peak of lockdown. An ETF, or "exchange-traded fund," is a pooled investment security like a mutual fund but it trades on an exchange like a stock. Have Watchlists? The S&P 500 Real Estate sector has struggled this year amid recession concerns and rising bond yields. With an . The fund features a valuation that is significantly lower than the overall US market. . New Real Estate ETF RIET Deems Fit, Homebuilders: Why This Time Was Different, Mortgage rates rise slightly but new home sales not impacted, Scarce Existing Homes Boosting New Home Sales, Alternative Allocations: Opportunities In Commercial Real Estate, The Global Housing Inspection Report - 2023 Edition. key questions our readers have been asking us about this fund, above and key stats, buy or sell analysis and holdings), go to Finny and look for "REM". That almost sounds like a stable investment, but theres a big catch: these REITs use a lot of leverage, so a sharp jump in interest rates quickly amps up their borrowing costs. The aim of our models is to select the best ETFs within each risk category, so that investors can pick an ETF that matches their particular risk preference in order to better achieve their investment goals. Wed like to share more about how we work and what drives our day-to-day business. The iShares Trust iShares Mortgage Real Estate ETF (BATS: REM) has 50 holdings diversified evenly across small, mid, and large-cap equities, also allocatingless than half of its assets to the financi U.S. equity ETFs exposed to highest yield are beating broader markets. Since its inception, REM has delivered about 2.37% CAGR total return, compared to ~10.5% from SPY and over 4.4% from IEF. What are the cons of investing in historical returns? I have no business relationship with any company whose stock is mentioned in this article. Visit a quote page and your recently viewed tickers will be displayed here. The following are A prospectus, obtained by clicking the Prospectus link, contains this and other important information about an investment company. iShares Residential Real Estate Capped ETF (REZ) focuses entirely on the residential real estate sector. 0 bond holdings The iShares Mortgage Real Estate ETF (REM) is an exchange-traded fund that is based on the FTSE Nareit All Mortgage Capped index, a market-cap-weighted index of residential and commercial mortgage REITs. REM's ALTAR Score is approximately 3.3 standard deviations above the category average. The fund has posted a 64% total return since it started trading in May 2007, which is impressive, considering that period included the housing meltdown. Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com! At the portfolio level, I follow a variation of Dalios All Weather Portfolio. It's miraculous that it has a positive CAGR at all since inception. 7. [email protected] . Pending home sales in the U.S. declined a whopping 8.6% in June from the month prior as the red-hot housing market cools down, but ETFs focused on housing appear on track to continue to outperform the Kenneth Leon, CFRA research director on housing, joins 'The Exchange' to discuss homebuilding companies and the housing market decline. I wrote this article myself, and it expresses my own opinions. And with the 85+ population set to triple in the next 30 years, this is a market thats only just started to boom. According to data from the National Association of Realtors, sales of existing homes increased 7% in September. Lawrence Yun, the association's chief economist, linked the rise in sales to the brief After the housing market finally started cooling off a bit over the summer, sales rebounded in September. History backs that up, and puts paid to the notion that REITs and interest rates head in opposite directions: from October 2004 to June 2006, a period when rates rose from 2.75% to 6.25%, VNQ actually gained 34%. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. iShares Mortgage Real Estate ETF (REM) IQ U.S. Real Estate Small Cap ETF (ROOF) Is a Real Estate ETF a Good Investment? Analysts Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. For those who are new to the ETF, REM invests its assets in domestic real estate stocks and REITs. The FTSE NAREIT All Mortgage Capped Index measures the performance of the residential and commercial mortgage real estate, mortgage finance and savings associations sectors of the U.S. equity market. However, it lagged in other areas such as total return and volatility. The fund invests at least 80 . Here, I will just provide a recap of the most relevant information to facilitate the new discussions. REMX ETF Price Forecast. box on the left, or immediately after the URL (e.g. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. Premium subscribers For naked puts: Greater of 60% or 90% of market value of deliverable, plus option value, minus out of the money amount (if any); or 20% or 30% of strike price + option value. As detailed in my last article, the fund provides the following advantages and disadvantages: Advantage 1: excellent current income. For those reasons, I think youre better off investing in the Vanguard REIT Index Fund (VNQ), which is in some ways a mirror image of the iShares US Real Estate ETF. Join. REM provides exposure to the U.S. residential and commercial mortgage real estate sectors. Ivy Zelman, Zelman and Associates CEO, joins 'Closing Bell' to discuss how supply chain challenges are affecting the housing markets, why the booming housing market is lasting longer than she expected More people are flipping homes, but they are making less of a profit. In an exclusive interview with Yahoo Finance, Grant Cardone, Entrepreneur and Author, discusses the recent surge in commercial real estate sales amid the Covid-19 pandemic. Not a registered user? No recommendation or advice is being given as to whether any investment is suitable for a particular investor. This gives investors a less expensive way to invest in real estate than other methods. All quotes are in local exchange time. Our To learn more, click here. How much of the dividend is Return of Capital? The ETF fell from this level in February 2020 to $13.50 in March 2020 and has since retraced 65% of its fall. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters. About Vanguard Global ex-US Real Est ETF The investment seeks to track the performance of a benchmark index. To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research. Margin calls will be generated for any accounts with equity that is less than the margin required. Current performance may be higher or lower than the performance data quotes. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. The fund is also heavily focused on healthcare REITs (31.5% of the portfolio), including two big names: Ventas, Inc. (VTR) and Welltower Inc. (HCN), at 7.6% and 6.4% of its holdings, respectively. We also respect individual opinionsthey represent the unvarnished thinking of our people and exacting analysis of our research processes. (REM 2.70%). About SPDR Portfolio S&P 500 High Div ETF. Consider that: And unlike the healthcare REITs that these ETFs own, most investors havent heard of my favorite firms yet. Learn more. For me, I care more about the reduced volatility risks. In this REM ETF review, we'll address Overview. To report a factual error in this article, iShares Mortgage Real Estate Capped ETF (REM), affordability factor or the availability factor. Advantage 2: lower valuation. This means that not only can you collect yields north of 8% today, but youre also positioned to collect 15-20% upside in just the next 12 months as other investors pile into these reliable dividend payers. Good Holdings Diversity. Top Ten Comparable ETFs only shown here. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Apr. Being a passive investor puts you at unnecessary risk. Donoghue Forlines Tactical Income Fund Buys iShares 0-5 Year High Yield Corporate Bond ETF, 7 Great ETFs to Buy for Dividend-Hungry Investors, 6 Overlooked High-Yielding ETFs in Focus Post Fed Minutes, Fed Cuts Rates to Near Zero: ETFs & Stocks to Explode Higher, Mortgage Real Estate ETF (REM) Hits New 52-Week High, Why Investors Should Consider Mortgage REITs Instead Of Long-Dated Treasuries. can also build and save all-ETF portfolios. Twitter: @ETFResearchCtr, Standardized Annual Returns (as of 05/31/2023), Short Interest (as % of shares outstanding). If you have an ad-blocker enabled you may be blocked from proceeding. That's a custom score from 0 to 100 that we generate based on how good this fund is for the casual investor. REM buy reasons? Theres a lot of familiarity in their top 10 holdings, too, with Simon Property Group again holding top spot along with Ventas, Welltower, and HCP Inc. (HCP), also making an appearance. Whos right? As an example, the largest holding Annaly Capital Management is leveraged about 6x. At Schwab, every year we survey 1,000 Americans on what it means to feel wealthy. CNBC's Diana Olick reports that home flipping has made a comeback this year, but still remains less profitable than it was. Some content on this tab for Individual & Professional subscribers only. REM weaknesses REM? It is a good fund for investors who need high current income. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. bullish opinion paid off handsomely and the ETF has gained a solid 52% since my post - plus, investors also earned a (TTM) dividend of 7.22%. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Zacks proprietary quantitative models divide each set of ETFs following a similar investment strategy (style box/industry/asset class) into three risk categories- High, Medium, and Low. The Morningstar Rating for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Muni National Intermediate-Term Bond ETFs, Transparency is our policy. Start your FREE trial. Nvidia has investors wondering: How long can a stock grow faster than the market? Meantime, youll be pocketing a 3.6% dividend yield, which isnt much to get excited about compared to the next two ETFs, which pay out far more and give you greater diversification and lower fees, to boot. Even the total return is significantly improved. Read carefully before investing. Find the latest iShares Mortgage Real Estate Capped ETF (REM) stock quote, history, news and other vital information to help you with your stock trading and investing. Passively managed funds that track an index will have lower fees vs. actively managed funds. I am not receiving compensation for it (other than from Seeking Alpha). 2 ETFs to Watch for Outsized Volume on International TIPS & Mortgage Real Estate, Want "Dividend Champions"? It's about choice, control, and clarity and also . Real time prices by BATS. An exchange traded fund, or ETF, is a basket of investments such as stocks or bonds. Learn everything you need to know about iShares Mortgage Real Estate Capped ETF (REM) and how it ranks compared to other funds. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. But instead of messing around with REIT ETFs, I prefer to handpick my own stocks. HOW WE RANK BEST FIT FUNDS. However, growth investors, long-term as well as short-term, can look elsewhere as the real estate market may not experience high growth going forward. JPMorgan, Goldman, Citi and Morgan Stanley boost dividends after Fed stress tests, ETFs to turn to as Fed sets stock market up for rising inflation and interest rates; GameStop heads to IWF. Find out how much money you would've had today had you invested $1 in the stock market daily, starting with your birth date. Thats why Im encouraging my subscribers to lock in these juicy dividends today while theyre still cheap. The investment objective of the iShares FTSE NAREIT Mortgage REITs Index Fund ETF seeks to track the investment results of an index composed of U.S. REITs that hold U.S. residential and commercial mortgages. looses but i hold for dividend. REM has a lower 5-year return than DEEP REM negatives? Volatility Shares is a small ETF manager, and BTIX will be its first crypto-related . If you do not, click Cancel. Mortgage REIT giants Annaly Capital, AGNC Investment, and Starwood Property Trust make up almost 40% of the ETF's assets, with a total of three dozen holdings rounding out the portfolio. Total Net Assets $556.100M. Click here to gain access and try the Lead-Lag Report FREE for 14 days. Gear advertisements and other marketing efforts towards your interests. Do you ever second-guess yourself for not investing in a certain stock? To report a factual error in this article, iShares Mortgage Real Estate Capped ETF (REM). Entering text into the input field will update the search result below. Should You Buy REM? 3 Stocks to Own as Alzheimer's Drugs Bring Relief, 3 Software Stocks to Upload to Your Portfolio. What will be the hot pick from this years Sohn hedge-fund conference? REM As a result, these companies are all highly leveraged (think about the mortgage to equity ratio in your own mortgage). Financial Select Sector SPDR Fund (ticker: XLF) 0.10%. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Finance. - Jane Sherwood Ace. Please disable your ad-blocker and refresh. Econofact: Where are house prices rising the most? Open $22.57. Paulina Likos April 23, 2021. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Risk-On/Off $RORO, Junk-On/Off $JOJO, & $ATACX Portfolio Manager. ** Disclosure** I am associated with Envision Research, I am an economist by training, with a focus on financial economics. And also the high leverage of the underlying holdings can lead to large volatility. Were living longer than ever but will require more care as we get older. The information contained in this writing should not be construed as financial or investment advice on any subject matter. And at the same time, I have been managing several investment accounts for my family for the past 15 years, going through two market crashes and an incredible long bull market in between., My writing interests are mostly asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets. 9 important things you should know about BlackRock REM ETF. My award-winning market research gives you everything you need to know each day, so you can be ready to act when it matters most. These stocks were the biggest winners. Key Data. For most individual investors . What is REM underlying index? This places REM in the 99th percentile among funds in the category. Unless a black swan passes by, price data suggest that REM's theoretical bottom is $28. The Index measures the performance of the residential and commercial mortgage real estate sector of the U.S. equity market. or any observation concerning a security or investment provided in the etf.com Service is not a recommendation to buy, sell, or . Day Range 22.28 - 22.57. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. Ecolab Inc. ( ECL ), Ferguson PLC ( FERG) and Danaher Corp. ( DHR) are the fund's three top holdings, with about . A favorable operating backdrop and extremely high dividend yield of the new real estate ETF RIET make it an enticing bet. Market Cap N/A. Donoghue Forlines Tactical Income Fund Buys iShares 0-5 Year High Yield Corporate Bond ETF, SPDR ICE Preferred Securities ETF, BTC iShares International Select Dividend ETF, Sells JPMorgan Ultra-Short Income ETF, iShares M REIT ETFs have been rallying hard lately with most funds hovering around a 52-week high level. I focus on large volatility risks caused by high leverage of underlying holdings. The second leading category, water utilities, makes up 16.1% of the fund's assets. Fund Description. After I completed my PhD, I have been professionally working as a quantitative modeler, with a focus on the mortgage market, commercial market, and the banking industry for more than a decade. Mortgage real estate investment trusts may sound intimidating, but their operating . If you have an ad-blocker enabled you may be blocked from proceeding. iShares Mortgage Real Estate Capped ETF (REM) boasts an eye-popping yield of 13.3%, but its portfolio, 99% of which is devoted to mortgage REITs, boasts eye-popping risk to match. Therefore, the ideas discussed here will be all along the lines of diversification and risk-parity. Reuters is not liable for any errors or delays in content, or for any actions taken in reliance on any content. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606. Develop and improve features of our offerings. Roughly 10,000 of them will turn 65 every single day for the next 17 years. Start your FREE trial, Content on this tab for Individual & Professional subscribers only. Mortgage REITs Offer Double-Digit Returns. Visit Performance Disclosure for information about the performance numbers displayed above.