This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Real Estate ETFs to Avoid in Double Dip

NEW YORK (TheStreet Ratings) -- The American real estate market is not out of the woods yet. In fact, it has taken a wrong turn slumping back to levels not seen since 2002, according to home prices track in the Standard & Poor's/Case Shiller Index. The resurgent real estate recession gives pause to banking investors and should also worry investors in real estate.

The exchange-traded funds focused on a rise in the value of real estate have been shown to be average to poor performers on a risk-adjusted return basis in our latest ratings. Real estate ETFs to avoid include: iShares Cohen & Steers Realty Majors Index Fund (ICF) rated at D, Direxion Daily Real Estate Bull 3X (DRN) rated at C, iShares FTSE NAREIT Real Estate 50 (FTY) rated at C-,ProShares Ultra Real Estate (URE) rated at E, RMR Real Estate Income Fund (RIF) rated at E, LMP Real Estate Income Fund Inc (RIT) rated at D-, Nuveen Real Estate Inc Fund (JRS) rated at C-, and iShares Dow Jones US Real Estate (IYR) rated at C-.

The real estate investment trusts, or REITs, held by iShares' Cohen & Steer Realty Majors Index Fund include 7.9% Simon Property Group (SPG), 7.6% Equity Residential (EQR), 6.9% Public Storage (PSA),6.7% Vornado Realty Trust (VNO),and 6.4% Boston Properties (BXP).

The tough real estate market in South Florida - ground-zero for the American foreclosure crisis - has pushed property managers into using the latest technology to reach prospective tenants. According to CRE-sources.com, Butters Realty & Management now features smart-phone readable, 12" high QR codes on their signage to get location specific information to potential commercial real estate customers instantaneously.

Even though the bullishly targeted real estate ETFs are not recommended, the bearish real estate ETFs have performed worse in our ratings as they are generally not suitable as long-term investments. All three funds are ranked in the 'Sell' range for inferior risk-adjusted return with Direxion Daily Real Estate Bear 3X (DRV) rated at E-, ProShares Ultra Short Real Estate (SRS) rated at E-, and ProShares Short Real Estate Fund (REK) rated at D. Stand clear.

-- Reported by Kevin Baker in Jupiter, Fla.



For additional Investment Research check out our Ratings Research Center.

Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs