For investors seeking momentum, SPDR S&P Homebuilders ETF (XHB - Free Report) is probably on radar now. The fund hit a 52-week high, and is up about 34.7% from its 52-week low price of $30.92/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
XHB in Focus
This ETF focuses on the homebuilding segment of the U.S. market. It has key holdings in the building products and homebuilding segments. XHB charges investors 35 basis points a year in fees and has top holdings in PulteGroup, Fortune Brands Home & Security and NVR Inc (see: all the Industrial ETFs here).
Why the Move?
The homebuilding space has been an area to watch lately, given the optimism surrounding the spring selling season — the peak time for home sellers. Mortgage rates have been on a decline thanks to a dovish Fed, which is now looking for a rate cut this year. Lower mortgage rates coupled with decelerating home price growth are encouraging people to buy more homes. All these factors make the homebuilder space a great place to stay invested in.
More Gains Ahead?
Currently, XHB has a Zacks ETF 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, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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 >>