For investors looking for momentum, SPDR S&P Homebuilders ETF (XHB - Free Report) is probably a suitable pick. The fund just hit a 52-week high, up roughly 44.7% from its 52-week low of $30.56/share.
But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
XHB in Focus
The fund seeks to replicate investment results which, before fees and expenses, correspond generally to the total return performance of the S&P Homebuilders Select Industry Index. It provides exposure to the homebuilders segment of the S&P TMI, which comprises the following sub-industries: Building Products, Home Furnishings, Home Improvement Retail, Homefurnishing Retail, and Household Appliances. XHB is charging 35 bps in fees. The fund has amassed $674.6 million in AUM.
Why the Move?
The Fed has cut interest rate by 25 basis points to the range of 1.75-2% for the second time at the FOMC meeting last month. When interest rate drops, mortgage rates fall, making real estate or refinancing mortgages more affordable. This in turn results in higher real estate sales. Further, Sino-US trade war tensions, uncertainty in markets due to geopolitical tensions, slowdown in the global economy and Brexit woes are making investors jittery, adding to the lure of these funds. This is because these funds offer outsized yields and act as good investing options when increased safe-haven trade keeps yields at check.
More Gains Ahead?
Currently, XHB has a Zacks Rank #3 (Hold) with a High-risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems XHB might remain strong given a positive weighted alpha of 22.80.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
For investors looking for momentum, SPDR S&P Homebuilders ETF (XHB - Free Report) is probably a suitable pick. The fund just hit a 52-week high, up roughly 44.7% from its 52-week low of $30.56/share.
But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
XHB in Focus
The fund seeks to replicate investment results which, before fees and expenses, correspond generally to the total return performance of the S&P Homebuilders Select Industry Index. It provides exposure to the homebuilders segment of the S&P TMI, which comprises the following sub-industries: Building Products, Home Furnishings, Home Improvement Retail, Homefurnishing Retail, and Household Appliances. XHB is charging 35 bps in fees. The fund has amassed $674.6 million in AUM.
Why the Move?
The Fed has cut interest rate by 25 basis points to the range of 1.75-2% for the second time at the FOMC meeting last month. When interest rate drops, mortgage rates fall, making real estate or refinancing mortgages more affordable. This in turn results in higher real estate sales. Further, Sino-US trade war tensions, uncertainty in markets due to geopolitical tensions, slowdown in the global economy and Brexit woes are making investors jittery, adding to the lure of these funds. This is because these funds offer outsized yields and act as good investing options when increased safe-haven trade keeps yields at check.
More Gains Ahead?
Currently, XHB has a Zacks Rank #3 (Hold) with a High-risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems XHB might remain strong given a positive weighted alpha of 22.80.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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