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A Real Estate Bottom Creates A Bullish Case For This ETF (URE)

June 30th, 2009

real-estateReal Estate has historically been one of the best places to invest for the last century.  The recent financial crisis and housing bubble has scared investors from investing in the real asset.  Some investors see opportunity in the crisis and are buying bank owned property and other distressed inventory at bargain basement prices. 

Larry Edelson from HoweStreet.com gives five reasons why housing has bottomed:

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  • New home inventories are now at previous recession lows
  • Existing home inventories have also fallen sharply
  • Anecdotal evidence points to a pickup in demand
  • Housing affordability has come back down to the CPI inflation trend line
  • On an international basis, U.S. property prices are cheaper than they’ve been in at least 10 years

If you would like to invest in the housing market, ETF’s offer a great way to play the market.  Edelson suggests an  ETF to invest in “I would consider the ProShares Ultra Real Estate ETF (URE), which tracks twice (200 percent) the daily performance of the Dow Jones U.S. Real Estate Index. Though leveraged and not a pure real estate play in the sense that it also includes commercial Real Estate Investment Trusts (REITS) in its holdings, I believe it’s one of the better ways to play a turnaround in property prices.”

The investment (URE) seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Real Estate index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.

We have included a list of the top ten companies within the ETF:

TOP 10 HOLDINGS ( 43.21% OF TOTAL ASSETS)  
 
Company Symbol % Assets
ANNALY CAPITAL MANAG NLY 3.95
AVALONBAY CMTYS AVB 2.36
BOSTON PPTYS INC BXP 3.07
Djusre Swaps N/A 9.94
EQUITY RESIDENTAL EQR 3.24
HCP, INC. HCP 2.9
PLUM CREEK TIM REIT PCL 3.01
PUBLIC STG PSA 4.49
SIMON PPTY GRP INC SPG 6.51
VORNADO REALTY TRUST VNO 3.74

See the full story from Larry Edelson: Here

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ETF BASIC NEWS, URE


 

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