The benchmark real estate investment trust (REIT) exchange-traded funds (ETFs) sold off Tuesday along with most of the rest of the stock market after the consumer price index (CPI) came in higher than expected.
The Real Estate Select Sector SPDR Fund XLRE tanked by 3.80%. The iShares U.S. Real Estate ETF IYR got hit by 3.70%.
The S&P 500 dropped by 4.32%. and the Nasdaq Composite Index slipped by 5.16%. Relatively speaking, the REIT funds outperformed the broader indexes. Still, it’s unpleasant for an investor to hold securities that have dropped significantly.
The Real Estate Select Sector SPDR fund consists of 34 positions in all. Top holdings include American Tower Corp. AMT, Prologis Inc. PLD and Crown Castle Inc. CCI. Here is the daily price chart:
Despite the heaviness of the selling, the fund managed to stay above the mid-June and mid-July lows. Note that the positive divergences remain in place for the relative strength indicator (RSI). Now that the CPI is out, investors may be waiting to see if the producer price index (PPI) confirms the CPI, which may cause further unloading.
The iShares U. S. Real Estate ETF consists of 83 holdings, so it tracks a more diverse universe of REITs than the Real Estate Select Sector SPDR fund. Nonetheless, its top three positions are just the same — American Tower, ProLogis and Crown Castle Inc. After that, the holdings began to look a bit different between the two ETFs.
This is the daily price chart for the iShares U. S. Real Estate ETF:
The fund sold off but stayed well above those mid-June and mid-July lows. The question will be — can this slightly bullish trend continue after the release of the PPI numbers? Note that the RSI continues to hold a positive divergence with regard to price action.
Looking for high dividend yields without the price volatility?
Real estate is one of the most reliable sources of recurring passive income, but publicly-traded REITs are just one option for gaining access to this income-producing asset class. Check out Benzinga's coverage on private market real estate and find more ways to add cash flow to your portfolio without having to time the market or fall victim to wild price swings.
Latest Private Market Insights
- Arrived Homes expanded its offerings to include shares in short-term rental properties with a minimum investment of $100. The platform has already funded over 150 single-family rentals valued at over $55 million. Read more...
- The Flagship Real Estate Fund through Fundrise is up 7.3% year to date and has just added a new rental home community in Charleston, SC to its portfolio. Real more...
Find more news, insights and offerings on Benzinga Alternative Investments
Not investment advice. For educational purposes only.
Charts courtesy of StockCharts
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Enter your email address to be the first to know about new offerings for real estate, startups and other alternative investments with strong potential returns.