A Broader Way to Build Housing-Sector Exposure
SPDR S&P Homebuilders ETF--which also holds home-furnishing, building-products, and home-retailer stocks--is a low-cost way to invest in a sector with positive potential.
SPDR S&P Homebuilders ETF--which also holds home-furnishing, building-products, and home-retailer stocks--is a low-cost way to invest in a sector with positive potential.
Bob Goldsborough: For inexpensive exposure to the United States' homebuilding sector, one exchange-traded fund that investors can consider is SPDR S&P Homebuilders ETF (XHB). It's far and away the largest homebuilding ETF, and it holds homebuilding companies, building-products manufacturers like Masco (MAS), home-furnishing retailers, and home-improvement retailers like Home Depot (HD) and Lowe's (LOW).
Since the start of the year, the homebuilding sector has posted mixed data. However, there are some clear conditions in place that offer the sector the potential to perform well looking ahead. These include still-tight home inventories, cheap credit, growth in the household formation rate, and strong employment trends.
Some of the concerns regarding the sector include home prices growing more rapidly than workers' wages, potential for an interest-rate hike from the Federal Reserve, and recent weak housing-start data. Overall, Morningstar's equity analysts take a positive view toward the homebuilding sector.
When choosing a homebuilding ETF, price is an important consideration as all such funds tend to perform similarly. XHB charges an annual fee of 35 basis points, which is more than 25% less than its closest peer.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.