Investors seeking market exposure to home construction and the banks that support the housing market can invest without picking stocks using these three exchange-traded funds.
The iShares U.S. Construction ETF (ITB) - Get Report has 44 components involved in home construction heavily weighted to homebuilder stocks. D R Horton (DHI) - Get Report and Lennar (LEN) - Get Report remain the largest components, with weightings of 11.5% and 10.75%, respectively.
The iShares U.S. Regional Banks ETF (IAT) - Get Report has 54 components that are considered regional banks, but does not include the four "too big to fail" money center banks. US Bancorp (USB) - Get Report and PNC Financial (PNC) - Get Report remain the largest components with weightings of 15.9% and 11.3%, respectively. These banks are most likely to be involved in mortgage lending, credit cards, and small business lines of credit.
The First Trust Nasdaq ABA Community Bank Index Fund (QABA) - Get Report has 160 components that are smaller publicly traded banks. These banks fund construction and development loans and commercial real estate loans for new communities and strip malls.
Before we look at the weekly charts and key levels for these ETFs, let's look at key recent housing market data.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.