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iShares Residential Real Estate Capped ETF (REZ)

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  • Oct. 31, 2014, 12:49 PM
    • The FTSE NAREIT All REIT Index climbed 6.94% through October 29 vs. the S&P 500's return of 0.62%. Strong earnings reports from REITs helped, but maybe helping more was a steep drop in interest rates amid the broad market's major swoon during October's first two weeks.
    • Leading the way for REITs were manufactured homes up 10.19%, followed by industrial (9.79%), healthcare (9.77%), and shopping centers (9.43%).
    • Among the REIT laggers were timber (up 4.42%), mortgage REITs (3.71%), and infrastructure (1.89%).
    • ETFs: IYR, VNQ, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, IFNA, GQRE, WREI
    | 3 Comments
  • Oct. 13, 2014, 4:19 PM
    • Both equity and mortgage REITs saw plenty of buying as nearly all of the rest of the market was lit up bright red, and Treasury ETFs signaled a sharp drop in yields when government bonds reopen for trade tomorrow (closed this session for Columbus Day).
    • A sampling of equity names: Senior Housing Properties (SNH +1.2%), Medical Properties Trust (MPW +1.4%), Gramercy Property Trust (GPT +1.7%), Equity Residential (EQR +0.7%), Inland Real Estate (IRC +0.9%), Sovran Self Storage (SSS +1.1%), Highwoods Properties Trust (HIW +1%).
    • One equity REIT sector in the red along with the rest of the market is lodging amid worsening Ebola fears: Ashford Hospitality Trust (AHT -2.9%), Sunshine Hotel Investors (SHO -1.4%), LaSalle Hotel Properties (LHO -1.5%), Summit Hotel Properties (INN -1.5%).
    • Mortgage REITs: American Capital Agency (AGNC +1.4%), CYS Investments (CYS +2.2%), Invesco (IVR +1.1%), American Capital Mortgage (MTGE +1.5%), Western Asset (WMC +1.1%).
    • ETFs: IYR, VNQ, REM, MORL, MORT, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
    | 5 Comments
  • Oct. 3, 2014, 2:38 PM
    • A big year for REITs took a pause in September, helped along by a strong rise in interest rates for most of the month. The FTSE NAREIT Index fell 5.63% last month, well below the S&P 500's 1.4% decline.
    • Infrastructure REITs were the best-performing REIT sector for the third straight month, falling 2.11%. The best-performing sector in 2014 - up 20.29% - apartment REITs had a particularly tough September, falling 7.51%.
    • Year-to-date, the REIT sector has returned 13.08% vs. the S&P 500's 6.6% gain.
    • ETFs: IYR, VNQ, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
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  • Aug. 20, 2014, 3:35 PM
    | 4 Comments
  • Aug. 8, 2014, 3:27 PM
    • The FTSE Nareit All REIT Index posted a return of -0.19% in July, outperforming the S&P 500 by 119 basis points. Infrastructure REITs led he way, returning 2.87%, with apartments (+2.44%) and manufactured homes (+2.14%) also among the better-performing REIT sectors.
    • Office REITs were negative by a small handful of basis points, but have returned 17.72% YTD, and investor cooled on the previously hot lodging sector with a total return of -2.2%. Timber was hit hard, returning -5.4% and bringing its YTD gain to just 0.34%.
    • ETFs: IYR, VNQ, DRN, REZ, URE, SRS, ICF, RWR, SCHH, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
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  • Jun. 9, 2014, 12:31 PM
    • With a 2.91% gain in May, REITs outperformed the Dow, S&P 500, and Russell 2000, but fell shy of the Nasdaq's 3.1% gain. Leading the way for REITs were infrastructure plays, returning 6.55% thanks to strong demand from wireless carriers as they transition from 3G to 4G, writes Trepp's Susan Persin.
    • Speaking last week at NAREIT's REIT Week, Crown Castle's (CCI) Ben Moreland also noted boosted demand from first responder/public safety networks.
    • Manufactured housing REITs returned 5.03 in May, and UMH Properties management - also at REIT Week - noted shipments are low by historical standards and financing remains a challenge even with Warren Buffett being a fan of the sector: Berkshire Hathaway (BRK.A, BRK.B) owns the two dominant lenders. Other players in manufactured housing: SUI, ELS.
    • ETFs: IYR, VNQ, DRN, REZ, URE, SRS, ICF, RWR, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, WREI
    | 2 Comments
  • Jun. 3, 2014, 12:40 PM
    | 1 Comment
  • May. 8, 2014, 3:43 PM
    • The FTSE NAREIT All REITs Index gained 2.88% in April, outpacing the S&P 500 by more than 200 basis points. The All Equity REITs Index gained 2.99%, while the Mortgage REITs index added 1.86%.
    • In the year's first four months, the FTSE NAREIT All REITs index is up 11.7%, more than 900 basis points better than the S&P 500.
    • The top performer in REITs through April is self-storage, with total return of 18.83% (the sector has been the subject of a few valuation-related downgrades of late). Other big gainers are Health Care up 16.84%, Apartments up 16.4%, and Home Financing up 15.36%.
    • Even with the gains this year, the dividend yield of the All REIT's Index remains a beefy 4.05%, about 200 bps higher than the S&P 500.
    • Related ETFs: IYR, VNQ, REM, MORL, MORT, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, FNIO, PSR, IFNA, WREI
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  • Apr. 2, 2014, 3:09 PM
    • The FTSE NAREIT All REIT's Index gained 8.57% in Q1, besting the S&P 500's 1.81% gain. The All Equity REITs index rose 8.52% and the Mortgage REITs Index powered higher by 11.16% (all figures are calculated on a total return basis).
    • Breaking it down further, the leading sector for Q1 was the apartment REITs, up 13.84%, followed closely by self-storage up 13.12%. Lagging were retail, shopping center, and commercial financing REITs, all up in the area of 9%.
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 1 Comment
  • Mar. 14, 2014, 1:14 PM
    • After a 4.69% gain in February, the FTSE NAREIT All REIT Index is higher by 8.22% in the year's first two months, with equity REITs up 8.13% and Mortgage REITs up 10.52%. The S&P 500 is up 0.96% through the end of February.
    • The top-performing REIT sector is Free Standing Retail with a 16.37% total return. Self-Storage is up 12.94%, Apartments up 12.23%, Home Financing up 12.14%. Industrial up 11.02%, Office up 10.03%.
    • Even after the nice run, the All REITs Index still offers a 4.04% dividend yield, about double that of the S&P 500.
    • Related ETFs: IYR, VNQ, REM, MORL, MORT, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, FNIO, PSR, IFNA, WREI
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  • Mar. 4, 2014, 9:06 AM
    • An interesting variant case for the outperformance of REITs this year - beating the S&P 500 by 822 basis points - comes from Goldman's Andrew Rosivach, who says interest rates have not been a good determinant of REIT relative performance and fund flows have been only marginally positive YTD.
    • Instead, he says, the best reason for the move this year is lower equity issuance. With most, if not all, of the sector trading well below book value, managements have refrained from raising capital - just $1.9B so far in 2014 compared to $41.4B for all of last year.
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | Comment!
  • Jan. 31, 2014, 10:26 AM
    • Working today - and for the whole month of January - as the broader market sells off are the REITs. The sector - both the equity REITs and mREITs - had been punished in 2013 as rates moved higher starting last May, but another four basis point decline this morning brings the 10-year Treasury yield down to 2.66% after starting the year at about 3%.
    • At least for the mREITs, nearly all put in what may turn out to be major bottoms late in 2013 amid jitters over year-end tax-loss selling and the commencement of the taper - sell the rumor, buy the news ... indeed.
    • Mortgage REITs: Annaly (NLY +1.1%+7.4% YTD, American Capital (AGNC +1.3%+9.1%, Invesco (IVR +0.5%+6.7%, Anworth (ANH +0.6%+10.9%, Apollo Residential (AMTG +0.7%+9.1%, AG Mortgage Investment (MITT +0.6%+5.6%.
    • ETFs: REM, MORT, MORL
    • Equity players: Realty Income (O +0.5%+9.6% YTD, National Retail (NNN +0.7%+9.8%, AvalonBay (AVB +0.8%+4.1%, Public Storage (PSA +0.6%+4.9%, Boston Properties (BXP +0.2%+7.8%, Liberty Trust (LRY +1%+7.9%.
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 5 Comments
  • Jan. 17, 2014, 12:00 PM
    • After a brutal 2013, equity REITs (VNQ) - trading at an 5% discount to NAV vs. 8% premium a year ago - are set up for a good year, writes Jack Hough in Barron's, but a pair of laboratory landlords look especially attractive.
    • Alexandria Real Estate Equities (ARE +0.1%) and BioMed Realty Trust (BMR +0.1%) are life-sciences REITs - renting specialized lab space to drug companies, schools, research hospitals, and such - and should benefit from benign trends like solid R&D spending, a red-hot biotech market, and the most drug approvals in 16 years last year.
    • "Unfairly lumped in with mortgage REITs and the like," says fund manager John Buckingham of BioMed, while Cowen's James Sullivan likes Alexandria for its reduced leverage and strong pipeline of new building projects. The stock trades at an 11% discount to NAV.
    • What about cuts in research spending at places like Merck and Pfizer? It's a good thing as the majors will look to partner with schools, hospitals, and research groups and do the work in research hubs owned by the REITs rather than on corporate campuses.
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 1 Comment
  • Jan. 15, 2014, 3:49 PM
    • "The urban myth is that there's a lock-step correlation between rising rates and REIT performance," says NAREIT economist Michael Grupe. "REITs are clearly not [bonds]."
    • Pointing to 16 periods since 1995 when rates rose sharply, but REITs performed well, Grupe says the sector's troubles since last spring is an overreaction to uncertainty.
    • Green Street Advisors' Mike Kirby takes the other side of the argument, calling REITs hybrid securities that behave like stocks sometimes and bonds at others. "History shows that when rates spike, REITs fare poorly."
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 3 Comments
  • Jan. 10, 2014, 2:44 PM
    • The broad averages are struggling following the jobs number, but the big decline in interest rates (the 10-year Treasury is now off 10 bps to 2.87%) has the equity REIT sector lit up bright green.
    • Ventas (VTR +4.4%) is having the biggest day, continuing to cruise through a couple of early-year downgrades (latest was Barclays on Wednesday). Among those also higher: National Retail Properties (NNN +3.1%), Realty Income (O +1.6%), Health Care REIT (HCN +2.5%), HCP (HCP +3.8%), RAIT Finanical (RAS +1.4%), Apartment Investment (AIV +2.9%), General Growth (GGP +1.6%), Inland Real Estate (IRC +1.5%), Government Properties (GOV +1.6%), American Campus (ACC +1.7%).
    • Relevant ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 3 Comments
  • Dec. 31, 2013, 10:43 AM
    • The morphing of equity REITs from a niche to a widely accepted and favored asset class has diminished the likelihood of outsized performance going forward, writes Morningstar's Samuel Lee. For decades, REIT yields averaged in the area of 7%, but a "regime shift" about 10 years ago has settled them down closer to 4%.
    • Further, another benefit of REITs - their lack of correlation with the broader market - has disappeared, says Lee, with their average market beta of 0.5 moving to more than one in the early 2000s, and staying there ever since.
    • "Anyone who buys REITs on historical risk/return characteristics without considering the fundamental drivers of return and potential changes to market structure is being reckless. A deeper look strongly suggests that REITs' diversification powers are down and so are their expected returns."
    • Lee has two suggestions for those looking for an inflation hedge: Cash - the Fed typically raises short-term rates inline with increases in inflation - and conventional equities.
    • Related ETFs: IYR, VNQ, REM, DRN, REZ, URE, SRS, RWR, ICF, SCHH, DRV, ROOF, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, WREI
    | 5 Comments
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REZ Description
The iShares FTSE NAREIT Residential Plus Capped Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE NAREIT All Residential Capped Index.
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