iShares Cohen & Steers REIT ETF (BATS: ICF)

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Manhattan Real Estate Market Recharged Post-Election, Says Developer

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Too Damn High! Rent Rising Faster Than Wages

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Greece &amp; U.S. REIT Investments: Is Now The Time To Try Some GUMBO?

ICF International Inc

The economy is continuing its record-setting pace after President Donald Trump&rsquo;s first week in office. The Dow crossed 20,000 for the first time, closing at an <a href="http://www.cnbc.com/2017/01/25/us-markets.html">all-time high</a> of 20,104.28 on Thursday. Not only has there been an uptick in the market, but confidence has been unprecedented in an area Trump himself is all too familiar with: Manhattan Real Estate.
&ldquo;Whether you are pro president or anti president, the reality is that the election really settled the markets a lot,&rdquo; said Ben Shaoul, president and founder of Magnum Real Estate, a leading real estate firm in Manhattan. &ldquo;The results of the election completely recharged the New York Real Estate Market. It's been a very positive thing. Manhattan continues to grow; it has exceeded growth expectations year after year.&rdquo;
<h3>Dodging The Recession Bullet</h3>
<a href="https://en.wikipedia.org/wiki/Ben_Shaoul">Shaoul</a> has been extremely optimistic about the current state of the economy after seeing investor reaction and confidence post-election. Magnum Real Estate is the third largest condo developer in Manhattan. He believes the results of election allowed the United States to dodge the recession bullet.
&ldquo;We have been fueling our economy with fictitious low interest rates, and that has done nothing for us. We need to do the opposite &mdash; lower the corporate tax rate, increase interest rates, stabilize the market &mdash; and that will yield in growth,&rdquo; he said.
Shaoul feels improvements in the real estate market will be seen when figures are released later this year.
&ldquo;There is no safer place to invest your capital than in the US. The big cities will continue to experience growth in both domestic and foreign investment. I think this year will be a good year, and I think 2018 will be a tremendous year for real estate.&rdquo;
<h3>Since Trump's Election...</h3>
<ul>
<li>SPDR Dow Jones REIT ETF (NYSE: <a class="ticker" href="/stock/rwr#NYSE">RWR</a>) is up 2.06 percent.</li>
<li>iShares Cohen &amp; Steers Realty Mag. (ETF) (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) is up 1.86 percent.</li>
<li>iShares Dow Jones US Real Estate (ETF) (NYSE: <a class="ticker" href="/stock/iyr#NYSE">IYR</a>) is up 1.96 percent.</li>
<li>Vanguard REIT Index Fund (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>) is up 2.24 percent.</li>
</ul>

News

Contracts

ICF Awarded $23 Million Residential Energy Efficiency Contract with Large Midwest Utility

&quot;A total of 21.3 million are spending 30 percent or more of their paycheck to cover the rent &mdash; also a record high,&quot; said CNN in <a href="http://money.cnn.com/2016/06/22/real_estate/rent-affordability-housing-harvard/index.html?iid=surge-hp-summary">a recent article</a>.
As rent prices skyrocket in high-cost-of-living cities, like <a href="http://www.cbsnews.com/pictures/10-most-expensive-cities-in-america/5/">San Francisco</a>, <a href="https://www.abodo.com/chicago-il/1-bedroom-apartments-for-rent#rent-report">Chicago</a> and <a href="http://www.cbsnews.com/pictures/10-most-expensive-cities-in-america/2/">New York City</a>, even supposed low-income-requirement cities like<a href="http://grist.org/cities/why-living-in-detroit-doesnt-come-cheap/"> Detroit</a> are seeing a rise in occupancy levels, which in turn leads to higher rent prices.
Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/06/8142826/real-estate-etfs-keep-rocking">Real Estate ETFs Keep Rocking</a>
According to CNN&#39;s Kathryn Vasel, &quot;In the 10 cities with the highest housing costs, renters with middle-class incomes are having a particularly hard time making ends meet. Nearly 75 percent of renters earning $30,000&ndash;$4,999 and 50 percent of those making $45,000&ndash;$75,000 living in these to markets are considered &lsquo;cost-burdened&rsquo; &ndash; meaning they spend at least 30 percent of their income on rent.&quot;
Development options are changing too. Take the emerging <a href="http://www.mlive.com/business/detroit/index.ssf/2014/10/650_million_detroit_red_wings_4.html">stadium-district</a> in Detroit, for instance. Fifty-six (56) loft units, 16 townhouses, 64 one-bedroom units &mdash; to name just a few apartment types &mdash; are being built in a $650-million-dollar private invested venture. Options like this are a draw to middle-aged people who are starting to opt for a rent payment over a mortgage. Forty (40) percent of renters fall within the 30&ndash;49 demographic.
As rent payments rise, younger people and low-income residents are being pushed to the side. Placed against the cost of a 15-year fixed mortgage, the real estate market may be in for a shakeup.

The Greek referendum &quot;thumbs down&quot; vote over the weekend has begun a process which apparently will spawn at least as many acronyms as there are possible outcomes.

	Investors in real estate investment trusts have already overcome the fear associated with investing in an asset class which is referred to by an acronym: R-E-I-T.

	Real estate investments are often referred to as an &quot;alternative asset class,&quot; vs. traditional stock and bond investments.

	However, allocating part of an investment portfolio to the alternative asset class of commercial real estate isn&#39;t necessarily wild or risky; it can be a form of diversification, a basic tenant of portfolio theory.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/14/12/5078858/4-popular-equity-reit-etfs-should-the-average-investor-take-a-look">4 Popular Equity REIT ETFs: Should The Average Investor Take A Look?</a></bzrelatedlink>
<h3>
	Tired Of Alphabet Soup?</h3>

	First there was &quot;Grexit,&quot; or Greek Exit.

	The recent vote has now spawned &quot;GIMBO,&quot; or Greek Limbo.

	When it comes to investing in institutional quality U.S. commercial real estate, the upheaval and uncertainty surrounding Greece and the eurozone may actually boil down to &quot;gumbo.&quot;

	GUMBO = Greek Uncertainty Market Buying Opportunity

	No longer just a tasty Cajun soup, here GUMBO becomes an acronym for a simple REIT strategy inspired by the chaos.
<h3>
	Tale Of The Tape - U.S. REIT Reaction</h3>

	An easy and cost-effective way for most investors to gain exposure to U.S. REITs is through ETFs.

	The four largest REIT ETFs are the: Vanguard REIT Index Fund (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>), iShares Dow Jones US Real Estate (NYSE: <a class="ticker" href="/stock/iyr#NYSE">IYR</a>), iShares Cohen &amp; Steers Realty Maj. (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) and SPDR Dow Jones REIT ETF (NYSE: <a class="ticker" href="/stock/rwr#NYSE">RWR</a>).

	Here is a mid-day snapshot during the first day of trading following the Greek referendum.

	<img alt="gumbo_-_ychart_etfs.jpg" height="459" src="/files/u80916/gumbo_-_ychart_etfs.jpg" width="606" />

	In the aggregate, these four REIT ETFs account for almost 94 percent of the total REIT ETF market.
<h3>
	Financial Metric Snapshot</h3>

	Mid-day July 6, for comparison:
<ul>
<li>
		USD/Euro = $1.107</li>
<li>
		U.S. 10-Year Treasury rate = 2.33 percent</li>
<li>
		U.S. 2-Year Treasury rate = 0.61 percent</li>
<li>
		The Greek 2-Year Bond rate was up 1,565 basis points, to 50.48 percent</li>
</ul>
<h3>
	Why U.S. Equity REITs?</h3>

	A flight to quality in the bond market, resulting in lower yields, is generally viewed as a positive for REITs by investors.

	Income investors often view REITs as a &quot;bond-like&quot; investments, at least in part stemming from the requirement of paying out at least 90 percent of taxable income in the form of dividends to shareholders.

	High quality U.S. real estate is often viewed by investors to be a good long-term investment, a hedge against inflation, and as a &quot;safe haven&quot; for international investors looking to safeguard their nest egg.
<h3>
	Bond Market &amp; REIT Shares</h3>

	In a rising interest rate environment, REIT shares tend to trade lower which results in an increase in the dividend yield, (keeping pace with higher bond rates).

	This trend played out during the first half of 2015, with REIT prices sliding due to concerns about rising interest rates.

	In fact, REIT shares have given up a large part of the gains from the relative outperformance during the 2014, which was fueled by a perfect storm of both strong real estate fundamentals and benign interest rates.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/14/12/5109871/the-biggest-reit-story-of-2014">The Biggest REIT Story Of 2014</a></bzrelatedlink>

	Due to the recent share price pullbacks, the majority of REIT sectors are currently trading below net asset value (NAV) per share, one indication of relative value for investors.
<h3>
	REIT Sectors Could Benefit The Most</h3>

	Two of the REIT sectors that are viewed as being most &quot;bond-like,&quot; are single-tenant net-lease and healthcare REITs.

	In both cases, the leases are typically long-term, often for 15 or 20 years.

	<img alt="gumbo_-_ychart_o_nnn_hcn_vtr_0.jpg" height="481" src="/files/u80916/gumbo_-_ychart_o_nnn_hcn_vtr_0.jpg" width="606" />

	During 2015 YTD even the &quot;blue-chip&quot; names in these sectors have been under pressure because of expectations of a rising interest rate environment.
<h3>
	Investor Takeaway</h3>

	If global investors flock to the U.S. dollar, U.S. Treasuries, and high quality U.S. real estate in a flight to safety, one way investors can participate in the upside is by owning shares of market cap weighted U.S. REIT ETFs.

	Since Large-cap U.S. REIT blue-chip names dominate the top 10 holdings of these REIT ETFs, they are a simple way to partake in some &quot;GUMBO&quot; without having to create a recipe from scratch.

Greece & U.S. REIT Investments: Is Now The Time To Try Some GUMBO?

On June 4, Oppenheimer REIT analysts Steve Manaker and Amit Nihalani published an &quot;Industry Update -- NAREIT Preview,&quot; focused upon interest rate trends and the overall real estate environment.

	Oppenheimer remains bullish for the next 12 to 18 months and remains Overweight on the REIT sector, because they feel the data indicates that the overall real estate environment trumps interest rates when it comes to REIT performance.

	The easiest way for most investors to gain exposure to the real estate asset class is to allocate a portion of their portfolio to real estate ETFs. Here are the four largest ETFs by dollar volume:
<ul>
<li>
		Vanguard REIT Index ETF (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>) - $26 billion, 143 REITs, 37.7 percent Top 10</li>
<li>
		iShares U.S. Real Estate ETF (NYSE: <a class="ticker" href="/stock/iyr#NYSE">IYR</a>) - $4.5 billion, 115 REITs, 34.9 percent Top 10</li>
<li>
		iShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) - $3.2 billion, 31 REITs, 57.5 percent Top 10</li>
<li>
		SPDR DJ Wilshire REIT ETF (NYSE: <a class="ticker" href="/stock/rwr#NYSE">RWR</a>) - $3 billion, 92 REITs, 44.5 percent Top 10</li>
</ul>
<h3>
	Tale Of The Tape - Past 12 Months</h3>

	The VNQ tracks the MSCI Equity REIT Index, a good proxy for the overall sector.

	<img alt="opco_-_ychart_4_reit_etfs_ttm.jpg" src="/files/u80916/opco_-_ychart_4_reit_etfs_ttm.jpg" style="width: 440px; height: 318px;" />

	On the other side of the coin, top performing ICF is comprised of 31 large/mid-cap REITs, heavily weighted toward the largest 10 REITs by market cap.
<h3>
	Tale Of The Tape - Past 5 Years</h3>

	<img alt="opco_-_ychart_4_reit_etfs_5_yrs.jpg" height="362" src="/files/u80916/opco_-_ychart_4_reit_etfs_5_yrs.jpg" width="500" />

	Having the lowest exposure to the Top 10 REITs contributed to underperformance by the IYR ETF vs. this peer group over the past five years.

	&lt;&gt;Oppenheimer - REIT Trends 
	1. Real Estate Fundamentals: &quot;The operating environment remains strong with demand growing faster than supply across most sectors and geographies. This is causing rising occupancy and rental rates. Development is increasing but remains relatively modest.&quot;

	<img alt="opco_-_ex_1_june_4.jpg" height="365" src="/files/u80916/opco_-_ex_1_june_4.jpg" width="631" />

	2. REITs vs. Rates: &quot;REITs both out- and underperformed in rising short- and long-term rate environments. During the last three Fed rate hikes REIT returns vs. the broader market were mixed.&quot;

	3. NAREIT Preview: Oppenheimer believes that NAREIT&#39;s upcoming REITWeek will be &quot;good-boring,&quot; with few surprises, and doesn&#39;t view it as catalyst for REIT shares, either up or down.

	4. REIT Valuations: Oppenheimer &quot;continue[s] to believe REITs will outperform the broader market given the attractive real estate environment and relatively attractive valuations. 
	The valuations of commercial real estate and REITs are similar, absolutely expensive but relatively attractive.&quot;

	5. REIT Sector Growth: Oppenheimer noted that there continue to be more REIT publicly listed through IPOs and spin-outs, than lost via M&amp;A or being taken private.

	A potential bigger catalyst cited by Oppenheimer, was in about a year equity REITs will become their own sector, separate and apart from Financials. Oppenheimer believes this will lead to a greater number of investors who will be buying REIT shares.
<h3>
	Oppenheimer - A Muted Supply</h3>

	Oppenheimer points out that &quot;the longer the duration of the development phase, the more vulnerable the real estate environment is to a slowing economy.&quot;

	<img alt="opco_-_ex_6_june_4.jpg" height="598" src="/files/u80916/opco_-_ex_6_june_4.jpg" width="560" />

	It is especially striking to look at the percent of private construction dollars vs. U.S. GDP, the top chart in blue, above.

	If demand for real estate were to begin to slow, the muted supply vs. historical averages should help mitigate occupancy losses and downward pressure on rental rates.
<h3>
	Oppenheimer - Bottom Line</h3>

	Oppenheimer believes that &quot;REIT underperformance YTD is due to investor concerns about the negative impact of rising rates on REITs and commercial real estate valuations.&quot;

	Oppenheimer&#39;s view continues to be that REITs are more economically sensitive than interest rate sensitive.

	A key takeaway is that &quot;given the strong investor interest in commercial real estate and the relatively wide spread between cap rates and interest rates, [Oppenheimer] believe[s] there is enough spread to absorb a rate increase.

Analyst Color

Previews

Events

Oppenheimer NAREIT Preview: A Bullish Outlook On Real Estate

Management

ICF International Announces Dean Bakeris As Vice President

The better-than-expected jobs number publicized March 6 sent the market into a downward spiral, as many believe a 2015 rate hike has become more plausible, ending the Federal Reserve&#39;s five-year zero interest rate policy.

	Sectors that have been affected the most are those that investors have flocked to the last couple years for their high yields in lieu of low-bond yields. Now that bond yields are jumping on an anticipated rate hike, many investors are dumping holdings in the utility, REIT and other high-yield sectors.

	Additionally, as the U.S. prepares for monetary tightening and Europe continuing its quantitative easing program, the dollar will continue to be positively affected through 2015.

	Highlighted below are a number of ETF that have been affected in some way by the positive jobs numbers and will be moving ahead of an anticipated interest rate hike by the Fed.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/futures/15/03/5314633/u-s-index-dollar-up-sharply">U.S. Dollar Index Up Sharply</a></bzrelatedlink>
<h3>
	SPDR Gold Trust</h3>

	The SPDR Gold Trust (ETF) (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) is an index that tracks movement of the gold futures market. Historically, a rise in the U.S. dollar will have a bearish effect on the precious metal and commodities as a whole.

	The ETF is down 13 percent over the last 12 months and down 7 percent over the last six months. Investors will often make a case for gold as a portfolio holding, but the trend is clear that lower prices are likely around the corner.

	The ETF has an expense ratio of 0.40 percent.
<h3>
	Utilities Select Sector SPDR</h3>

	The Utilities SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) follows 32 companies across five sub-sectors of the utilities industry. Electrical utilities at 56 percent and multi-utilities at 40 are the most heavily weighted sub sectors.

	The top individual holdings include:
<ul>
<li>
		Duke Energy Corp (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>) at 9 percent</li>
<li>
		NextEra Energy Inc (NYSE: <a class="ticker" href="/stock/nee#NYSE">NEE</a>) coming in at 8 percent</li>
<li>
		Dominion Resources, Inc. (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>) making up 7.6 percent of the ETF</li>
</ul>

	XLU is up 9 percent over the last 12 months and 2 percent over the last six. The utility ETF has a 30-day SEC yield of 3.42 percent and has an expense ratio of 0.15 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/futures/15/03/5312291/eurusd-sharply-lower">Euro/USD Sharply Lower</a></bzrelatedlink>
<h3>
	iShares Cohen &amp; Steers REIT</h3>

	The iShares Cohen &amp; Steers Realty Maj. (ETF) (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) provides exposure to the 30 largest U.S. real estate companies.

	The top holdings include:
<ul>
<li>
		Simon Property Group Inc (NYSE: <a class="ticker" href="/stock/spg#NYSE">SPG</a>) with a 7.9 percent holding</li>
<li>
		Public Storage (NYSE: <a class="ticker" href="/stock/psa#NYSE">PSA</a>) at 6.9 percent</li>
<li>
		Equity Residential (NYSE: <a class="ticker" href="/stock/eqr#NYSE">EQR</a>) making up 6.8 percent of the ETF</li>
</ul>

	ICF is up 20 percent over the last 12 months and up 7 percent over the last six months. The ETF has a 30-day SEC yield of 2.77 percent and an expense ratio of 0.35 percent.
<h3>
	iShares 20+ Year Treasury Bond</h3>

	The iShares 20+ Yr Trea.Bond (ETF) (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>) offers investors exposure to 29 long-term U.S. treasury bonds.

	Over the last 12 months, the ETF is up 18 percent and up 8 percent over the last six months. The ETF has a 30-day SEC yield of 2.5 percent and has an expense ratio of 0.15 percent.
<h3>
	PowerShares DB US Dollar Index Bullish Fund</h3>

	The PowerShares DB US Dollar Index Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>) is designed for investors who want to track the value of the U.S. dollar against the six major world currencies: the euro, the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. The most weighted currencies in the ETF are the euro at 58 percent, followed the yen at 14 percent and the pound at 12 percent.

	UUP is up 21 percent over the last 12 months and up 15 percent over the last six months. The ETF has an expense ratio of 0.80 percent.

Bonds

Currency ETFs

Markets

iShares Trust Barclays 20+ Year Treasury Bond Fund

PowerShares DB US Dollar Index Bullish Fund

ETFs Moving On Looming Fed Rate Hike

The month of February put the S&amp;P 500 back into positive territory for the year after a dismal 2015 start. The subsequent 5.5 percent gain was the best for the index since October 2011. The majority of sector ETFs closed in the green; however, there were a few that really struggled. Some of the best and worst of the month are listed below.
<h3>
	First Trust Dow Jones Internet Index ETF</h3>

	The First Trust DJ Internet Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>) consists of 42 Internet-related companies that generate at least 50 percent of sales/revenue from the Internet.

	The top individual holdings include:
<ul>
<li>
		Amazon.com, Inc. (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>) making up 8.2 percent</li>
<li>
		Facebook Inc (NASDAQ: <a class="ticker" href="/stock/fb#NASDAQ">FB</a>) with a 7.8 percent holding</li>
<li>
		Priceline Group Inc (NASDAQ: <a class="ticker" href="/stock/pcln#NASDAQ">PCLN</a>) coming in at 5.4 percent</li>
</ul>

	FDN is up 4 percent over the last 12 months, up 6 percent over the last six months and up 10 percent in the month of February. The ETF has an expense ratio of 0.57 percent.
<h3>
	iShares U.S. Home Construction ETF</h3>

	The iShares Dow Jones US Home Const. (ETF) (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) is made up of 37 U.S. companies that are in some way involved with the construction of residential homes.

	The top-weighted sectors in the ETF are household durables at 70 percent and building products at 13 percent.

	The top individual holdings include:
<ul>
<li>
		D.R. Horton, Inc. (NYSE: <a class="ticker" href="/stock/dhi#NYSE">DHI</a>) with a 10.9 percent holding</li>
<li>
		Lennar Corporation (NYSE: <a class="ticker" href="/stock/len#NYSE">LEN</a>)(NYSE: <a class="ticker" href="/stock/len-b#NYSE">LEN-B</a>) making up 10.8 percent</li>
<li>
		PulteGroup, Inc. (NYSE: <a class="ticker" href="/stock/phm#NYSE">PHM</a>) at 9.3 percent</li>
</ul>

	Over the last 12 months ITB is up 6 percent and 5 percent over the last six months. The ETF was one of the best performers in February, up 9 percent. ITB has an expense ratio of 0.43 percent.
<h3>
	iShares U.S. Pharmaceuticals ETF</h3>

	The iShares Dow Jones US Pharm Indx (ETF) (NYSE: <a class="ticker" href="/stock/ihe#NYSE">IHE</a>) consists of 39 pharmaceutical companies listed in the U.S.

	The top individual holdings include:
<ul>
<li>
		Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>) at 7.7 percent</li>
<li>
		Pfizer Inc. (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>) making up 7.6 percent</li>
<li>
		Merck &amp; Co., Inc. (NYSE: <a class="ticker" href="/stock/mrk#NYSE">MRK</a>) coming in at 6.5 percent</li>
</ul>

	IHE is up 29 percent over the last 12 months and 23 percent over the last six months. Through the month of February, the ETF has rallied 9 percent. The ETF has an expense ratio of 0.43 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/media/cnbc/15/03/5290883/dan-nathan-sees-unusual-options-activity-in-powershares-qqq-trust-series-1-">Dan Nathan Sees Unusual Options Activity In PowerShares QQQ Trust, Series 1 (ETF)</a></bzrelatedlink>

	Highlighted below are the worst performing ETFs through February.
<h3>
	Utilities Select Sector SPDR Fund</h3>

	The Utilities SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) follows 32 companies across five sub-sectors in the utilities industry.

	Electrical utilities at 57 percent and multi-utilities at 40 percent make up the majority of the portfolio.

	The top individual holdings include:
<ul>
<li>
		Duke Energy Corp (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>) at 9.1 percent</li>
<li>
		NextEra Energy Inc (NYSE: <a class="ticker" href="/stock/nee#NYSE">NEE</a>) coming in at 8.1 percent</li>
<li>
		Dominion Resources, Inc. (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>) totaling 7.5 percent.</li>
</ul>

	XLU is up 10 percent over the last 12 months and up 3 percent over the last six. The ETF struggled through February, however, down 6 percent. XLU has an expense ratio of 0.15 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/media/cnbc/15/03/5290893/dennis-gartman-is-a-buyer-of-ishares-ftsexinhua-china-25-index-etf">Dennis Gartman Is A Buyer Of iShares FTSE/Xinhua China 25 Index (ETF)</a></bzrelatedlink>
<h3>
	iShares Cohen &amp; Steers REIT ETF</h3>

	The iShares Cohen &amp; Steers Realty Maj. (ETF) (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) is made up of 30 of the largest U.S. real estate companies.

	The top holdings include:
<ul>
<li>
		Simon Property Group Inc (NYSE: <a class="ticker" href="/stock/spg#NYSE">SPG</a>) with a 7.9 percent holding</li>
<li>
		Public Storage (NYSE: <a class="ticker" href="/stock/psa#NYSE">PSA</a>) making up 7 percent</li>
<li>
		Equity Residential (NYSE: <a class="ticker" href="/stock/eqr#NYSE">EQR</a>) at 6.8 percent</li>
</ul>

	ICF is up 22 percent over the last 12 months and up 11 percent on the last six months. The interest-rate sensitive ETF was down 4 percent in February. ICF has an expense ratio of 0.35 percent.

	Keep in mind that one month does not make a market, but it is important to note that the two biggest sector ETF losers tend to underperform when interest rates are on the rise.

First Trust Dow Jones Internet Index Fund

iShares Dow Jones US Pharmaceuticals Index Fund

iShares Dow Jones US Homenstruction Index Fund

LEN-B

February's Best And Worst ETFs

Equity real estate investment trust (REIT) exchange traded funds (ETFs) are an easy way for investors to allocate a portion of their portfolios to the institutional-quality commercial real estate asset class.

	According to&nbsp;<a href="http://www.forbes.com/sites/johnjacobs/2014/12/05/how-should-reit-indexes-be-weighted-enterprise-value-vs-market-cap/">Forbes</a>, the four most popular funds are&nbsp;Vanguard REIT Index Fund (NYSEARCA:VNQ), iShares Dow Jones US Real Estate (ETF)(NYSEARCA:IYR), iShares Cohen &amp; Steers Realty Maj. (ETF)(NYSEARCA: ICF), and SPDR Dow Jones REIT ETF (NYSEARCA:RWR).

	The ETFs each own a basket of REIT shares in an attempt to mirror the performance of a published REIT.&nbsp;

	In the aggregate, these four REIT ETFs account for almost 94 percent of the total REIT ETF market.
<h3>
	Do REITs Really Help Diversify A Portfolio?</h3>

	The short answer is yes.

	Owning shares of REITs in addition to bonds, stocks, CDs or money market funds, has been shown by numerous studies to result in a more diversified portfolio.

	<img alt="nareit_-_equity_correlation_graphic.jpg" height="315" src="/files/u80916/nareit_-_equity_correlation_graphic.jpg" width="440" />

	Source: NAREIT
<h3>
	REIT Relative Outperformance</h3>

	<img alt="nareit_2000_-_2010_asset_performance_chart.jpg" height="469" src="/files/u80916/nareit_2000_-_2010_asset_performance_chart.jpg" width="635" />

	Equity REITs outperformed the broader market post dot-com bubble, and of course during the go-go real estate bubble which burst in 2008.

	However, it is notable that even during financial crises, and through the Great Recession, equity REITs outperformed both the S&amp;P 500 and Russell 2000 indices.
<h3>
	All 4 REIT ETFs Performed Well This Year</h3>

	<img alt="reit_-_etf_comparison_chart_dec_2014.jpg" height="386" src="/files/u80916/reit_-_etf_comparison_chart_dec_2014.jpg" width="635" />

	Still, there was a broad range of performance due to the differences in the underlying basket of stocks that comprise the particular index being closely tracked.
<h3>
	Very Efficient Investments</h3>

	According to Zacks, as of December 5, the fees charged for these ETFs ranged from a low of 10 bps (VNQ), to a high of only 46 bps (IYR), with the top two overall performers (ICF) and (RWR) charging fees of 35 bps and 25 bps, respectively. (Note: one hundred basis points, or 100 bps, is equivalent to a 1 percent fee).

	ETFs usually have a very attractive fee structure compared to peer mutual funds.

	Index funds and ETFs often perform as well or better than actively managed funds -- which typically charge higher fees. These higher fees can erode long-term portfolio performance and delay reaching financial goals, such as funding college tuition, or retirement.
<h3>
	Why Not Just Try The Top REITs In Each Sector?</h3>

	Unfortunately, that is easier said than done.

	In an ideal world, investors would be able to put together a basket of top-performing equity REIT stocks in each REIT sector, and gain alpha by outperforming the best ETFs. However, this takes time, effort, and skill-sets that many investors do not possess.

	<img alt="reit_-_etf_nnn_o_vs_arcp_stock_picks_chart.jpg" height="453" src="/files/u80916/reit_-_etf_nnn_o_vs_arcp_stock_picks_chart.jpg" width="635" />

	Additionally, there is absolutely no guarantee that even the most intelligent REIT investors can avoid a nasty surprise, such those that befell American Realty Capital Properties (NASDAQ: <a class="ticker" href="/stock/arcp#NASDAQ">ARCP</a>) shareholders during Q4 2014.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/real-estate/reit/14/10/4964762/american-realty-capital-properties-does-management-have-more-explaini">American Realty Capital Properties: Does Management Have More Explaining To Do?</a></bzrelatedlink>

	Trying to pick outstanding individual REIT stocks, or buying the highest dividend-payers in an attempt to &quot;chase yield&quot; is a far riskier strategy than many might realize. This endeavor should probably be left to the experts and professional advisors.
<h3>
	Big Picture - Looking Forward To 2015</h3>

	The end of the year is a great time for investors to review their portfolio, and meet with investment advisors with one eye focused on tax planning and the other eye focused on evaluating portfolio performance and re-balancing asset class allocations.

	Investors without any exposure to the REIT asset class may want to reconsider that strategy moving forward.

	<img alt="reit_-_vnq_vs_sp_500_2014_chart.jpg" height="451" src="/files/u80916/reit_-_vnq_vs_sp_500_2014_chart.jpg" width="635" />

	Investors who owned REIT shares in 2014 saw unusually high portfolio gains.

	While it is unlikely that U.S. commercial real estate will perform as well across the board in 2015, investors should still consider having exposure to institutional-quality U.S. commercial real estate as part of a long-term balanced portfolio strategy.
<h3>
	&#39;Smart Money&#39; Is Betting On International Real Estate</h3>

	During 2014, top real estate alternative asset manager The Blackstone Group, LP (NYSE: <a class="ticker" href="/stock/bx#NYSE">BX</a>) has been booking gains on U.S. commercial real estate portfolios assembled after the financial crises.

	Blackstone and several other U.S. firms have started buying both public and private portfolios of European, Latin American and Asian real estate assets, in an attempt to achieve more attractive returns on invested capital moving forward.

	Many U.S. REITs also own international assets as part of their portfolio, such as Simon Property Group, American Tower Corp., Prologis, Inc., Digital Realty Trust and W.P. Carey Inc. By purchasing shares of REIT ETFs, investors gain some limited exposure to international real estate by virtue of their holdings.
<h3>
	Bottom Line</h3>

	Owning shares of REIT ETFs is a cost-effective way for most investors to diversify their portfolio and benefit from the long-term appreciation and dividend income provided by the commercial real estate asset class.

	Image credit: <a href="https://www.flickr.com/photos/9731367@N02/6988181354/in/photolist-7ZF3Co-7ZBSkD-81HNCW-9gKwBh-oFLQbM-gzyQ99-6JuGtf-aiVWud-86z5Up-fFStwY-bDwfRq-6JuG6b-5MkhXb-8tous7-5SRVLm-iQncn8-9qVmTt-f4mwhD-nZye3u-pC7GM1-6Jqza8-9cvW1B-2P5Pnf-9nev3M-9bzRoC-7B3xYL-94agdy-92CM8e-91MBwT-95vWYz-8p936p-8XBLzM-e8kyn2-8YCtLs-94jjj5-7rLwos-7rLwnJ-5KH9gb-hDz9fM-eNh8ix-bAeRS3-6JqzDx-6JuFSs-8595bJ-65owkd-8ZiaNT-93umki-95eGDT-5UnDyN-8Y5osK">Philip Taylor</a>, Flickr

4 Popular Equity REIT ETFs: Should The Average Investor Take A Look?

Investors are looking to ride the momentum train into the end of the year and hop on some of the best-performing ETFs in the market. At the same time, investors that own shares of the same ETFs are getting concerned that a pullback may be right around the corner.

	The Market Vectors Semiconductor ETF (NYSE: <a class="ticker" href="/stock/smh#NYSE">SMH</a>), the iShares Cohen &amp; Steers Realty Maj. (ETF) (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) and the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: <a class="ticker" href="/stock/ibb#NASDAQ">IBB</a>) have all had a great year and are currently in the midst of their strongest <a href="http://www.benzinga.com/topic/rally">rally</a> during the last 12 months.

	The ETFs are up an average of 16 percent since October 15, around the time the overall market bottomed.

	The three ETFs have similar charts that include rallies followed by healthy pullbacks, the definition of a strong uptrend pattern. Heading into the first week of December, all three were trading with <a href="http://www.benzinga.com/topic/RSI">RSI readings </a>at extreme overbought levels.

	<bzrelateldlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/14/11/5027432/when-theres-a-pullback-on-a-bull-look-at-these-leading-etfs">When There&#39;s A Pullback On A Bull: Look At These Leading ETFs</a></bzrelateldlink>

	Historically, a high RSI reading is a signal that a pullback is imminent for the ETF.&nbsp;With that being said, long-term investors need to realize that <a href="http://www.benzinga.com/topic/pullbacks" style="font-size: 13px;">pullbacks</a> are a natural and healthy part of an uptrend.&nbsp;On the flip side, potential buyers of the overbought ETFs should be patient.

	Below are the stats and performance of the ETFs mentioned above.
<h3>
	Market Vectors Semiconductor ETF</h3>

	SMH tracks 26 of the largest publicly traded semiconductor companies across four countries. The U.S. at 71 percent and Taiwan at 16 percent are the highest weighted countries in the portfolio.

	The top individual holdings include:
<ul>
<li>
		Intel Corporation (NASDAQ: <a class="ticker" href="/stock/intc#NASDAQ">INTC</a>) with a 20 percent holding</li>
<li>
		Taiwan Semiconductor Mfg. Co Ltd. (ADR) (NYSE: <a class="ticker" href="/stock/tsm#NYSE">TSM</a>) making up 15.8 percent of the fund</li>
<li>
		Texas Instruments Incorporated (NASDAQ: <a class="ticker" href="/stock/txn#NASDAQ">TXN</a>) coming in at 5.3 percent</li>
</ul>

	SMH is up 30 percent year to date and 19 percent over the last six months. The ETF is in the midst of a 21 percent rally from the October 15 low. The semiconductor ETF has an expense ratio of 0.35 percent.
<h3>
	iShares Cohen &amp; Steers Realty Maj. (ETF)</h3>

	ICF provides exposure to the 31 largest U.S. real estate companies.

	The top holdings include:
<ul>
<li>
		Simon Property Group Inc (NYSE: <a class="ticker" href="/stock/spg#NYSE">SPG</a>) with a 7.9 percent holding</li>
<li>
		Public Storage (NYSE: <a class="ticker" href="/stock/psa#NYSE">PSA</a>) at 6.8 percent</li>
<li>
		Equity Residential (NYSE: <a class="ticker" href="/stock/eqr#NYSE">EQR</a>) making up 6.5 percent of the portfolio</li>
</ul>

	The ETF is up 29 percent year to date and up 10 percent on the last six months. It is up 10 percent from the October 15 low. The REIT ETF has an expense ratio of 0.35 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/bonds/14/12/5040572/international-bond-etfs-add-diversification">How International Bond ETFs Can Add Diversification</a></bzrelatedlink>
<h3>
	iShares NASDAQ Biotechnology Index (ETF)</h3>

	IBB is made up of 118 Nasdaq-listed biotechnology and pharmaceutical companies.

	The top individual holdings include:
<ul>
<li>
		Celgene Corporation (NASDAQ: <a class="ticker" href="/stock/celg#NASDAQ">CELG</a>) making up 8.7 percent of the ETF</li>
<li>
		Amgen, Inc. (NASDAQ: <a class="ticker" href="/stock/amgn#NASDAQ">AMGN</a>) with an 8.7 percent holding as well</li>
<li>
		Regeneron Pharmaceuticals Inc (NASDAQ: <a class="ticker" href="/stock/regn#NASDAQ">REGN</a>) coming in at 7.6 percent</li>
</ul>

	IBB is up 33 percent year to date and 26 percent over the last six months, as well as 18 percent since October 15. The biotech ETFs has an expense ratio of 0.48 percent.

	It is impossible to time the market perfectly and those who try often find themselves in trouble. However, it is possible to use trends and other indicators to improve the probabilities of determining an attractive entry and/or exit price.

AMGN

CELG

INTC

REGN

A Look At 3 Overbought ETFs

REIT ETFs that limped into the end of 2013 are looking as though the sector will finish out 2014 in a much different state, as investors look for high-yield options that perform well in low interest rate environments.

	<a href="www.benzinga.com/topic/REIT">REITs</a> are one of the few investment choices that investors can turn to when looking for above-average income. Falling rates allow REITs to refinance existing investments at lower rates, in turn increasing their margins.

	Year to date, the Vanguard REIT ETF (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>), the largest REIT ETF, is up 23 percent. Its fellow ETF, the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), is up 10 percent. However, for 2013, VNQ was down 3 percent versus SPY, which was up 26 percent.

	Highlighted below are three REIT ETFs and one mortgage REIT ETF that are leading the charge in the sector this year.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/real-estate/reit/14/10/4947951/3-reit-etfs-holding-up-despite-market-storm-etf-news-and-commentary">3 REIT ETFs Holding Up Despite Market Storm</a></bzrelatedlink>
<h3>
	iShares Cohen &amp; Steers Realty Maj. (ETF)</h3>

	The iShares Cohen &amp; Steers Realty Maj. (ETF) (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) provides exposure to large real estate companies that are fixtures within their sector. The ETF is comprised of 31 stocks with its top holdings being:
<li>
		Simon Property Group Inc&nbsp;at 7.9 percent</li>
<li>
		Public Storage&nbsp;at 6.9 percent</li>
<li>
		Equity Residential&nbsp;making up 6.1 percent of the portfolio.</li>

	The top five holdings account for 27 percent of the total allocation, taking away from some of the diversification that an ETF offers. The ETF is up 18 percent over the last 12 months and up 10 percent over the last six months. An expense ratio of 0.35 percent puts ICF in the middle of the road in comparison with its competitors.
<h3>
	Vanguard REIT ETF</h3>

	VNQ consists of 138 large real estate investment trusts. In terms of sector diversification, retail REITs account for 26 percent, and residential REITs come in at 16 percent.

	The individual top three holdings are identical to ICF with different weightings:
<li>
		Simon Property Group has an 8.7 percent holding</li>
<li>
		Public Storage is at 4.1 percent</li>
<li>
		Equity Residential accounts for 3.6 percent.</li>

	VNQ is up 14 percent over the last 12 months and 9 percent over the last six months. The REIT ETF boasts a low expense ratio of 0.10 percent.
<h3>
	Index IQ ETF Trust</h3>

	The Index IQ ETF Trust (NYSE: <a class="ticker" href="/stock/roof#NYSE">ROOF</a>) provides investors the means to track the overall performance of the small capitalization real estate market. ROOF tracks 61 securities and is a well-distributed ETF with its top 30 holdings ranging from 3.7 percent to 1.7 percent.

	The top three holdings of the ETF include:
<li>
		Sunstone Hotel Investors Inc&nbsp;with a 3.7 percent holding</li>
<li>
		Cubesmart&nbsp;at 3.3 percent</li>
<li>
		DCT Industrial Trust Inc at 3.3 percent</li>

	ROOF is up 11 percent over the last 12 months and 7 percent over the last six months. The expense ratio comes in at 0.69 percent, making it one of the more expensive REIT ETFs on the market.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/specialty-etfs/14/10/4963984/etfs-adding-alibaba">ETFs Adding Alibaba</a></bzrelatedlink>
<h3>
	iShares Mortgage Real Estate Capped ETF</h3>

	The iShares Mortgage Real Estate Capped ETF (NYSE: <a class="ticker" href="/stock/rem#NYSE">REM</a>) provides exposure to the residential and commercial mortgage real estate sector. It is made up of 36 stocks.

	Top holdings for REM:
<li>
		Annaly Capital Management, Inc.&nbsp;making up 15.6 percent</li>
<li>
		American Capital Agency Corp with a 11.7 percent holding</li>
<li>
		Starwood Property Trust, Inc.&nbsp;coming in at 7.2 percent.</li>

	REM has performed the worst out of the highlighted ETFs; it is up 3 percent over the last 12 months and down 1 percent over the last six months. The mortgage ETF has en expense ratio of 0.48 percent.

	The current low rates make the REIT sector very attractive for investors looking to add income to a portfolio or simply diversify. It is worth noting, however, that this sector is interest-rate sensitive and a rising interest rate environment could put pressure on the stocks.

Specialty ETFs

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

ROOF

The REIT ETFs Beating The Market

The yield on the 10-year Treasury bond has fallen to new yearly lows this week and is below 2.2 percent for the first time since June 2013.

	The concern about a slowdown in Europe has investors contemplating another round of quantitative easing from the Federal Reserve.

	Even though the U.S. economy is doing &ldquo;okay&rdquo; and the taper is ending this month, the issue with economies around the globe could pressure the Fed to come up with more easing programs.

	With rates at such low levels it forces income-minded investors to think outside the box when searching for acceptable yields. There is also the fact that equities appear to be more attractive with the interest rates on Treasuries at a yearly low.

	The combination of the two factors points an investor to sectors in the stock market that offer above-average dividend yields.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/specialty-etfs/14/10/4917473/a-look-at-3-ebola-and-african-related-etfs">A Look At 3 Ebola And African-Related ETFs</a></bzrelatedlink>

	The SPDR Utilities ETF (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) has held up very well during the market sell-off and is currently trading 2.2 percent from an all-time high. Since the S&amp;P 500 topped out on 9/19 the ETF is up 0.9 percent versus a fall of 7 percent for the equity index.

	The ETF currently has a dividend yield of 3.5 percent and is a basket of 30 U.S.-based utility companies. A low expense ratio of 0.16 percent make the ETF that much more attractive to investors looking to squeeze every penny out of their ETF and dividend.

	The&nbsp;iShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) is down 2.5 percent from the market high, underperforming XLU but well ahead of the overall market. The ETF is a basket of 30 REITs that pays a dividend yield of 3.2 percent. The ETF is well off its all-time high set in 2007, but is trading about 5 percent from its multi-year high set in 2013. The expense ratio comes in at 0.35 percent.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/14/10/4911348/micro-cap-etf-and-the-falling-greenback">Micro-Cap ETFs And The Falling Greenback</a></bzrelatedlink>

	The SPDR Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) is unchanged from the day the market began the sell-off and has been trading in a narrow range. The ETF has a dividend yield of 2.5 percent, which is not historically high; however, it is 30 basis points higher then the 10-year Treasury yield.

	Even more impressive is the fact the ETF hit a new all-time high last week as the stock market was breaking down. The ETF is composed of 40 stocks in sectors that range from food &amp; staples to household products to tobacco. The expense ratio is 0.16 percent.

	While all three of the ETFs are not the hot investment opportunities in a strong bull market, at this point in time adding them to an equity portfolio is a solid strategy to consider.

	More diversification at this point will help weather any downturns in the future and add some steady income.

Federal Reserve

3 Equity ETFs Benefiting From Low Interest Rates

The nonfarm payroll number this morning was as ugly as they come with the headline number of 143,000 job gains coming in well below expectations.

	The reaction from the market was surprising to many. The initial move in stocks was higher, but after the opening bell rang, the major U.S. equity indices floundered in the red.

	Not all sectors were down on the news, including bond ETFs that were moving higher on a big drop in the U.S. Treasury yields. Other interest rate sensitive sectors moving higher included utilities, REITs and housing.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/specialty-etfs/14/09/4825949/ecb-decision-boosts-etfs">ECB Decision Boosts ETFs</a></bzrelatedlink>
<h3>SPDR Utilities ETF</h3>


	The SPDR Utilities ETF (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is the best performing sector on Friday with a gain more 0.6 percent, as the ETF hits the best level in more than two months. With a large portion of investors buying the ETF for its dividend yield of 3.4 percent, a drop in interest rates makes the sector more attractive. Over the last year, the ETF is up 22 percent with dividends included. The expense ratio is a low 0.16 percent.
<h3>
	iShares U.S. Home Construction ETF</h3>

	The iShares U.S. Home Construction ETF (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) is also moving higher today largely in part due to lower interest rates keeping mortgage rates down and homes more affordable. The ETF has had a rough week after a big drop on Wednesday, but the last two days it has rebounded nicely. Over the last year, the ETF is up 16 percent. However, the chart is trendless and a breakout above $24.50 in the short-term is needed to confirm a new uptrend.
<h3>
	iShares Cohen &amp; Steers REIT ETF</h3>

	The <strongiShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) is having a decent day with a gain of 0.3 percent and is within a few ticks of hitting the best level in 16 months and only two percent from the best level since 2007. The three percent dividend yield is the reason for money moving into the sector ETF. Over the last year, the ETF is up nearly 25 percent with dividend payments included.</strongishares>
<h3>
	IQ US Real Estate Small Cap ETF</h3>

	The IQ US Real Estate Small Cap ETF (NYSE: <a class="ticker" href="/stock/roof#NYSE">ROOF</a>) is similar to ICF, except it concentrates solely on small cap REITs versus the large cap names its peer invests in. The current dividend yield of 6.9 percent makes the ETF even more interest rate sensitive. With dividends included, the ETF is up about 22 percent in the last 12 months.

	All four ETFs mentioned are moving on the fact interest rates are falling. With that being said the consensus on the street is that bonds will begin to fall sooner rather than later and that will push interest rates higher. If that is the case investors need to keep an eye on high yielding ETFs as they move in the opposite direction of interest rates.

4 ETFs Moving Higher On Jobs Number

<a href="http://www.benzinga.com/topic/etfs">ETF</a> Outlook for Friday May 9, 2014

	Guggenheim Solar ETF (NYSE: <a class="ticker" href="/stock/tan#NYSE">TAN</a>)

	The ETF finished down another two percent yesterday, to the lowest close in three months. But, the tide may be turning for the solar power ETF as the government and President Obama are set to announce more incentives for the alternative energy source. 
Investors could ride the government wave and look for higher prices in TAN today.

	Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>)

	The country remains in the middle of a tense conflict with the <a href="http://www.benzinga.com/topic/ukraine">Ukraine</a>, but as the headlines have quieted this week the stocks have begun to rally. RSX is up over seven percent in the last four days and is nearing a multi-month high.

 The $24.25 area will be significant resistance for the ETF and if it were able to close above the level it would be a significant breakout. That being said, when there are outside factors such as geopolitical uncertainty, the charts are not always the best gauge.

 Related: <a href="http://www.benzinga.com/markets/bonds/14/05/4514059/bond-etfs-outperforming-stocks-tlt-jnk-hyd-vwob-spy">Bond ETFs Outperforming Stocks</a>

	SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>)

	There are two levels to watch on SPY. The all-time closing high is $188.88 and the highest intraday price is $189.64. The ETF closed yesterday at $187.86 after hitting an intraday high of $189.05. The ETF was on pace to close at the best level in history before a late day selling spree pushed the ETF to the lower end of the daily trading range.
 The bad news is that the ETF continues to struggle to breakout. The good news is that it has been trading in a very narrow trading range and the sellers are not in control. Support levels to watch include $186.60 and $185.

	iShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>)

	The ETF is about to complete its fifth month of bullish action after rallying from a low that was reached in mid-December 2013. The ETF is up 18 percent in that time frame and yesterday closed at the best level in over 11 months. Add in the above-average dividend yield and ICF has been one of the top performers in 2014. The current yield on the ETF is 3.1 percent. 
The ETF is now in overbought territory and could see a short-term pullback, but based on the charts it should not last long and would be a buying opportunity.

Broad U.S. Equity ETFs

Emerging Market ETFs

Market Vectors Russia ETF Trust Shares of Beneficial Interest

ETF Outlook For Friday May 9, 2014 (TAN, RSX, SPY, ICF)

The stock market over the last couple of months has been manic to say the least as the broad-based indices are near unchanged for the year, but several sectors have moved into correction territory.

	One segment of the market that has held strong and outperformed has been the old-school dividend stocks.

	The Dow Jones Utility Average came within five points of a new all-time last week and the MSCI U.S. REIT Index is breaking out to a new nine-month high. The two sectors are considered “boring," but with a decent dividend yield and bullish charts they cannot be ignored.

	Utilities

	The SPDR Utilities Sector ETF (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is a basket of 30 stocks that is currently paying a 3.5 percent dividend yield. A little over half of the portfolio is composed of electric utilities with the remainder made up of what are termed multi-utilities. Year-to-date the ETF is up 12.3 percent, easily outpacing the return of the overall U.S. stock market. The expense ratio is a low 0.16 percent.

	See also: <a href="http://www.benzinga.com/etfs/sector-etfs/14/04/4500376/3-intriguing-canada-etfs-for-your-portfolio">3 Intriguing Canada ETFs For Your Portfolio</a>

	Outside of the U.S. the utilities stocks have also been performing well. The WisdomTree Global ex-U.S. Utilities ETF (NYSE: <a class="ticker" href="/stock/dbu#NYSE">DBU</a>) is up 7.4 percent this year and it also pays a 3.5 percent dividend yield. The ETF charges a higher expense ratio of 0.58 percent due to its international exposure. The three countries with the largest exposure include Brazil, France, and the U.K.

	REITs

	The longer-term chart of the iShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) is not was bullish as the utilities, however the recent breakout to a multi-month high is promising. The current yield on the ETF is 3.2 percent and year-to-date the ETF is up 13.3 percent. The basket of 30 stocks charges an expense ratio of 0.35 percent.

	Internationally there is the iShares International Property ETF (NYSE: <a class="ticker" href="/stock/wps#NYSE">WPS</a>), which concentrates on developed markets around the world with the exclusion of the U.S. Japan, Hong Kong and Australia make up over half of the portfolio. The dividend yield is 3.1 percent and the expense ratio is 0.48 percent. Year-to-date the ETF has not performed as well with a small loss. The loss can be attributed to the Japanese market struggling over the last few months.

	While there are more options for investing in dividend-paying equities, the utilities and REITs have been stable options for investors during this tumultuous time for equities.

WisdomTree Trust International Utilities Sector Fund

iShares S&P Developed ex-US Property Index Fund

Old-School Dividend ETFs Leading The Way (XLU, ICF, DBU, WPS)

The much worse than expected jobs report this morning may not be good news for the American economy.

	However, when it comes to the stock market there are always sectors that will profit from any news story.

	Today there are a number of winners in early trading that are being boosted by the fact the jobs number will likely lead to prolonged involvement of the Federal Reserve.

	Bonds

	The yield on the 10-year Treasury is back below three percent and falling in early trading as investors prepare for the Fed artificially holding interest rates low well into 2014. The drop in the yield caused by the rally in bonds that has the iShares 20+ Year Treasury Bond ETF (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>) up 0.6 percent to the best level in two weeks.

	Precious Metals

	More quantitative easing is bullish for the precious metals. The asset purchase program essentially lowers the value of the U.S. Dollar and therefore is good for the value of gold and silver. The SPDR Gold ETF (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) is up 1.1 percent and closing in on a three-week high. The iShares Silver ETF (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>) is rallying 2.4 percent on the news.

	See also: <a href="http://www.benzinga.com/markets/bonds/14/01/4208938/breaking-down-fridays-jobs-report">Breaking Down Friday's Jobs Report</a>

	Keep in mind that the trend for the precious metals remains bearish and that the recent bounce has been just a blip on the long-term term chart. The path of least resistance is down for the metals and eventually the Fed will exit the bond asset program.

	Stocks

	The stock futures were up big before the jobs number was released and after investors digested the magnitude of the report, the buying slowed. The SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>)is up slightly, 0.2 percent in early trading, but it has struggled to gain any momentum after the jobs number.

	While the news is not good for the economy as a whole, the fact the Fed will remain involved with quantitative easing is good for the market. The reason stocks are barely moving is that investors are struggling with the fact the economy is still not strong and the help of the Fed.

	Dividend Sectors

	The sectors leading the market this morning have one thing in common – dividends. With rates looking like they will stay low for the next few months it makes the dividends that are currently paid more attractive.

	The SPDR Utilities ETF (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is up 1.5 percent today and is breaking to a one-month high. The iShares Cohen &amp; Steers Realty ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>), which owns a basket of REITs, is up 1.1 percent, also looking for a one-month high.

	The trading day is young and it is a Friday, expect lots of volatility as investors realign their portfolios to reflect the news from this morning.

Econ #s

ETFs Moving On The Jobs Report (SPY, GLD, TLT, XLU)

ETF Outlook for Tuesday, January 7, 2014

	iShares MSCI Ireland Index ETF (NYSE: <a class="ticker" href="/stock/eirl#NYSE">EIRL</a>)

	The first bond auction for Ireland since the country’s exit from the EU bailout plan turned out to be better than most expected. The country was planning on selling $3 billion Euro in 10-year debt. The indications were that demand was upwards of $9 billion euro, well above expectations.

	The strong demand helped push the yield on the 10-year bond down nine basis points to 3.26 percent. This is well below the 15 percent the bond was yielding at the height of the crisis in 2011. EIRL was a big winner last year with a gain of 43 percent and all indications are that the turnaround in Ireland will continue.

	United States Natural Gas ETF (NYSE: <a class="ticker" href="/stock/ung#NYSE">UNG</a>)

	With record cold temperatures gripping a large portion of the country, the demand for natural gas has increase exponentially. Over the last month there have been some nasty cold spells that have hit everywhere from the Northeast to the South and in between.

	See also: <a href="http://www.benzinga.com/etfs/sector-etfs/14/01/4192842/etf-outlook-for-the-week-of-january-6-2013-thd-iez-xlf-xlu#">ETF Outlook for the Week of January 6</a>

	The price of natural gas is often driven by extreme weather and the current situation is no different. UNG rallied to end 2013 with a gain of 9.5 percent and has recently pulled back from a multi-month high. Look for the ETF to open higher today with traders concentrating on the current freezing temps.

	iShares U.S. Broker Dealers ETF (NYSE: <a class="ticker" href="/stock/iai#NYSE">IAI</a>)

	Citigroup downgraded Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) to a hold and is sending the stock down nearly 2 percent in pre-market trading. The broker-dealer is the number three holding in IAI and could have a ripple affect on the other stocks in the portfolio.

	Look for IAI to be on the defensive when the market opens this market and have trouble keeping up with the other financial ETFs. The main reason for the downgrade was valuation, SCHW was up 70 percent last year.

	iShares Cohen &amp; Steers REIT ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>)

	The major stock indices closed lower for the third consecutive session yesterday to begin the year. One sector that was able to attract some buyers was the REITs. Even though most investors are concerned about rising interest rates and what it may do to high-income investments such as REITs, there was some buying yesterday.

	The ETF is at a critical level on the charts. ICF closed yesterday at $75.69 after trading down to $74 to begin the year. The $73-$74 area is major support for the ETF going back several years. If ICF were unable to hold support it would be a major sell signal for the entire sector.

Commodities

Pre-Market Outlook

iShares MSCI Ireland Capped Investable Market Index Fund

EIRL

iShares Dow Jones US Broker Dealers Index Fund

SCHW

ETF Outlook for Tuesday, January 7, 2014 (EIRL, UNG, IAI, ICF)

ETF Outlook for Wednesday, December 18, 2013:

	Market Vectors Oil Service ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>)

	After the closing bell Tuesday, Barclays said it expects the oil services sector to outperform the overall market in the coming years and raised its target on a number of individual stocks. Many of the stocks that were mentioned are members of OIH and other oil service ETFs.

	After falling by seven percent in the last month, it would not be surprising to see the ETF rally today on the back of the bullish comments as well as the technical oversold reading. The top three holdings in OIH had their targets raised: Schlumberger (NYSE: <a class="ticker" href="/stock/slb#NYSE">SLB</a>), Halliburton (NYSE: <a class="ticker" href="/stock/hal#NYSE">HAL</a>) and National Oilwell Varco (NYSE: <a class="ticker" href="/stock/nov#NYSE">NOV</a>).

	SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>)

	The market will likely trade in a narrow range Wednesday until the Fed makes its announcement on interest rates and policy going forward. Everyone already knows the Fed funds rate will remain unchanged. However, the wild card is whether the Fed believes the U.S. economy and jobs market is strong enough to begin the tapering of their $85 billion/month asset purchase program.

	See also: <a href="http://www.benzinga.com/etfs/sector-etfs/13/12/4162436/oversold-etfs-looking-attractive-ihe-csd-psce#">Oversold ETFs Looking Attractive (IHE, CSD, PSCE)</a>

	Considering the economy is “okay” and there are still way too many people out of work the odds of a taper announcement is not high. That being said, others (including the Fed) may view the economy as improving at a good enough pace to begin the tapering. No tapering announcement should send the SPY and stocks higher. The announcement that tapering will begin cannot be good for SPY or stocks around the globe.

	iShares Realty Majors Index ETF (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>)

	The basket of mainly large-cap REITs is on the verge of hitting a fresh multi-year low if it cannot hold the low of August 2013. With interest rates increasing and the talk of a taper in the near future it makes the high yielding investment vehicles less attractive. Even though ICF currently pays a dividend yield of 3.4 percent, it is not enough to lure investors that believe the 10-year yield could be in that range within the next 12 months.

	See also: <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/12/4148559/weakness-in-retail-etfs-a-buying-opportunity-xrt-rth-amzn">Weakness in Retail ETFs a Buying Opportunity (XRT, RTH, AMZN)</a>

	The level to watch on ICF for the rest of the week is $73.78, the closing low from August 19. Considering the ETF closed yesterday at $74.69, it would not take a big move to send ICF through major support and generate a major sell signal.

	Market Vectors Semiconductor ETF (NYSE: <a class="ticker" href="/stock/smh#NYSE">SMH</a>)

	Merger activity in the semiconductor sector has investors putting money into the volatile technology arena. SMH was able to outperform its market peers yesterday with a gain of 0.8 percent and is now trading less than one percent from a new multi-year high. The technology sector is often overlooked as investors love to hate the big names such as Intel (NASDAQ: <a class="ticker" href="/stock/intc#NASDAQ">INTC</a>) for some reason. Apparently that has not been the best strategy as the ETF continues to move higher even as the broader market struggles.

ETF Outlook for Wednesday, December 18 (SPY, SMH, ICF, OIH, INTC)

&nbsp;

	Check out<a href="http://blog.newconstructs.com/wp-content/uploads/2013/03/130318-Danger-Zone.mp3" style="color: rgb(0, 123, 184); font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">&nbsp;this week&rsquo;s Danger Zone interview</a>&nbsp;with Chuck Jaffe of&nbsp;<a href="http://www.moneylifeshow.com/" style="color: rgb(0, 123, 184); font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">Money Life</a>&nbsp;and MarketWatch.com.

	Ventas Inc. (NYSE: <a class="ticker" href="/stock/vtr#NYSE">VTR</a>) is in the Danger Zone. Over 50% of VTR&rsquo;s business is providing senior housing communities, so it has benefited from a rapidly growing demand for elder care. For several years now, the supply of senior living facilities has grown to keep up with current and expected demand. Nevertheless, some supply/demand imbalance has persisted, enabling VTR to enjoy unusually high margins.But those days are over. First, supply is catching up to demand. In 2011 alone, competitors Brookdale Senior Living (BKD) and Health Care REIT (HCN) both increased their number of units owned by over 16,000, while Elmcroft Senior Living added over 14,000 units.

	And many other firms, public and private, are jumping into the same businesses as VTR and driving down margins and returns on invested capital (<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC</a>).

	VTR is cannot maintain the high margins that helped it to succeed in the early parts of the decade. VTR&rsquo;s<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>&nbsp;(Net Operating Profit After Tax) margin declined from a peak of 72% in 2003 down to a low of 8% in 2011 before rebounding slightly last year.

	These declining margins have hurt VTR&rsquo;s&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>&nbsp;even as it has still managed to grow GAAP net income. As Figure 1 shows, VTR&rsquo;s return on invested capital (<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC</a>) has been declining for several years now. For the last two years,&nbsp;<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC</a>&nbsp;has been less than&nbsp;<a href="http://blog.newconstructs.com/2012/11/08/wacc-definition-and-formula-for-the-weighed-average-cost-of-capital/" style="color: rgb(0, 123, 184);">WACC</a>&nbsp;(Weighted Average Cost of Capital), causing VTR to have negative&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>.
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		Figure 1: Competitive Advantage Is Gone
</div>
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		<a href="http://blog.newconstructs.com/wp-content/uploads/2013/03/VTR_Fig1.jpg" style="color: rgb(0, 123, 184);"><img alt="VTR_Fig1" class="aligncenter size-full wp-image-5821" height="211" src="http://blog.newconstructs.com/wp-content/uploads/2013/03/VTR_Fig1.jpg" style="border-style: none; display: block; text-align: center; margin: 1em auto;" width="436" /></a>Sources: New Constructs, LLC and company filings
</div>

	These misleading earnings&mdash;accounting earnings that are positive and increasing while&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>&nbsp;are negative and declining&mdash;help VTR to earn its Very Dangerous rating. The accounting rules that govern GAAP net income&nbsp;<a href="http://blog.newconstructs.com/2010/05/13/104/" style="color: rgb(0, 123, 184);">were not designed for equity investors</a>. They were designed for debt investors. Current accounting rules give companies a vast number of ways to manipulate earnings.

	Our measure of&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>&nbsp;reverses these distortions and shows the true amount companies are earning for investors.

	VTR&rsquo;s negative economic earnings are not a death sentence, but they are a sign of a company struggling to adapt its business model to a newly competitive environment. Unfortunately for investors, VTR is priced like a company about to see massive profit growth and expanding margins and ROICs.

	Figure 2 shows the stock price of VTR against its&nbsp;<a href="http://blog.newconstructs.com/2012/06/18/price-to-economic-book-value-or-price-to-ebv/" style="color: rgb(0, 123, 184);">economic book value</a>&nbsp;(EBV) per share since 1999. EBV is a measure of the value of a company&rsquo;s value assuming zero growth in profitability. For much of the early part of the decade, VTR&rsquo;s price stayed at or near its EBV per share. In recent years, however, the stock price has risen far above EBV per share.
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		Figure 2: Trading at Nearly 6x Economic Book Value
</div>
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		<a href="http://blog.newconstructs.com/wp-content/uploads/2013/03/VTR_Fig2.jpg" style="color: rgb(0, 123, 184);"><img alt="VTR_Fig2" class="aligncenter size-full wp-image-5820" height="212" src="http://blog.newconstructs.com/wp-content/uploads/2013/03/VTR_Fig2.jpg" style="border-style: none; display: block; text-align: center; margin: 1em auto;" width="443" /></a>Sources: New Constructs, LLC and company filings
</div>

	Simply put, the valuation of VTR is writing checks that the business cannot cash. To justify the current price of ~$81.80/share, VTR must grow&nbsp;<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>&nbsp;by 20% compounded annually for the next 16 years. Expecting that kind of growth from a company with declining margins and&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>&nbsp;is simply too risky.

	Sometimes the market focuses too much on one trend while ignoring other key factors, like valuation. In this case, excitement over a rapidly growing aging population has caused many investors to overlook the evolution in the elder care marketplace and assume VTR can continue its winning ways as if that evolution never took place. Investors need to be looking at the balance sheet rather than the census.

	I also recommend avoiding the following ETFs because of their large allocation to VTR and Neutral or worse rating.
<ol style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">
<li>
		iShares FTSE NAREIT Residential Index Fund (NYSE: <a class="ticker" href="/stock/rez#NYSE">REZ</a>) &ndash; 10% allocation to VTR &ndash; Dangerous Rating.</li>
<li>
		iShares Cohen &amp; Steers Realty Major (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) &ndash; 7% allocation to VTR &ndash; Very Dangerous Rating</li>
<li>
		PowerShares Active U.S. Real Estate Fund (NYSE: <a class="ticker" href="/stock/psr#NYSE">PSR</a>) &ndash; 6% allocation to VTR &ndash; Dangerous Rating</li>
</ol>

	Sam McBride contributed to this article

	Disclosure: David Trainer and Sam McBride receive no compensation for writing about any specific stock, sector, or theme.

iShares FTSE NAREIT Residential PLUS Capped Index Fund

Danger Zone: Ventas 

John Paulson, founder of Paulson &amp; Co. and one of the world's most successful hedge fund managers, claims that his success can be traced to eating candy when he was a kid in the new book <a href="http://www.amazon.com/gp/product/1118065522/ref=as_li_ss_tl?ie=UTF8&amp;tag=benzinga-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1118065522">The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds</a><img src="http://www.assoc-amazon.com/e/ir?t=benzinga-20&amp;l=as2&amp;o=1&amp;a=1118065522" width="1" height="1" alt="" />The Alpha Masters. He tells the story that, as a five year old, his grandfather bought him a pack of Charms candies. He took the candy to school the next day and realized that he could sell the individual pieces out of the box. He learned how to arbitrage as a five year old, making a profit by selling the candy out of this box, buying one for himself with the proceeds, and pocketing the difference.
Paulson's story is one of dedication, drive, and heart. He is a natural risk-taker, but is very good at weighing the risk/return of any situation. He was able to judge demand for Charms candies in kindergarten and was able to judge the risk/reward of shorting the US housing market through CDS in 2007 and then the risk/reward of buying financials at the depths in 2009.
As he says in the book, "I liked buying and selling. I would take the profits I made and put them in a piggy bank - that was what I called the 'bank.' Eventually, I filled up the bank and that's what I thought banking was. So at a very young age, I wanted to be a banker." Paulson is a classic example of doing what you like and following your passions, no matter where they take you.