The real estate investment trust (REIT) market is a volatile and confounding place at present.
While the commercial real estate market continues to struggle, the housing market is on the rebound from its drop last year, with prices rising on mortgages and interest rates amid a significant housing shortage. While many investors want to take advantage of this upward spike in home prices, the decline in commercial retail has made people rightfully wary of traditional REITs.
Instead, investors may want to turn to other ETFs that exclusively focus on stocks in the housing market, staying out of commercial retail entirely. I have one to share with you — Hoya Capital Housing ETF (HOMZ).
Founded in 2019 by Pettee Investors, HOMZ tracks the Hoya Capital Housing 100 Index, a tier-weighted index of 100 equities representing the residential housing industry in the United States.
The fund’s holdings are selected through a screening process that looks for stocks with significant business operations in home ownership and rental operations, construction, home improvement and furnishings or home financing, technology and services. The top 100 companies are then included in the fund’s portfolio. The index is also reconstituted and rebalanced semi-annually.
Currently, HOMZ has $38.41 million assets under management, and has an expense ratio of 0.30%. It boasts a P/E ratio of 15.60 and a distribution yield of 1.93%.
The majority of HOMZ’s holdings are based in the United States, with an additional small percentage of its holdings based in Canada, making it fully centralized around North American stocks. Its current top holdings include Lowe’s Companies, Inc. (LOW), Home Depot, Inc. (HD), Toll Brothers, Inc. (TOL), KB Home (KBH) and Meritage Homes Corporation (MTH).
Courtesy of StockCharts.com
As seen by the chart above, HOMZ has been steadily rising over the past several months and is trading above both its 50- and 200-day moving averages. As of July 24, the fund had risen 9.53% in the past month, 15.47% in the past three months and an impressive 28.54% year to date.
While there will never be a place quite like home, what makes an ideal home is different for everyone, and the same holds true for one’s investment plan. Remember to always consider your personal financial situation and goals before making any investment. Investors are always encouraged to do their due diligence before adding any stock or ETF to their portfolios.
I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You may just see your question answered in a future ETF Talk.
