Exchange traded funds that invest in
jumped 4% last week amid early signals of a potential housing recovery and optimism generated by the government's plan to buy $1 trillion of troubled bank assets.
While these positive developments suggest that happy times are here again, investors might be wise to wait for stronger signs that
is on the upswing. Homebuilders, which rely on sales of newly constructed homes, might face a prolonged recovery as the glut of cheap properties for sale shrinks. In addition, cut-rate prices will reduce revenue and put downward pressure on margins.
iShares Dow Jones U.S. Home Construction Index Fund
SPDR S&P Homebuilders ETF
were the top-performing ETFs in the category, rising 14% and 13%, respectively. The S&P 500 Index advanced 6.2% during the same period. The funds have lost more than 45% in the past year.
ETFs that invest in homebuilders benefited from industrywide stock gains.
(KBH - Get Report)
energized investors last week with a lower-than-expected quarterly loss. The company's shares increased 27% last week.
Shares of rival
climbed 20% during the period.
(TOL - Get Report)
rose 11%. The three stocks have lost more than 10% in the past year.
For more information, check out an
explanation of our ratings
Best-Performing Real Estate Funds
for the Week Ending Thursday Mar. 26
|RMR Hospitality and Real Estate Fund
|RMR Preferred Dividend Fund
|iShares Dow Jones US Home Construction Index Fund
|SPDR S&P Homebuilders ETF
|Neuberger Berman Real Estate Securities Income Fund
|LMP Real Estate Income Fund Inc
|RMR Asia Pacific Real Estate Fund
|ING Clarion Global Real Estate Income Fund
|RMR Dividend Capture Fund
|Alpine US Real Estate Equity Fund
Source: Bloomberg & TheStreet.com Ratings