A real estate investment adviser has created an exchange-traded fund that tracks an index called the Home 100, which is based on a wide variety of stocks related to the U.S. residential industry.
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Hoya Capital launched its fund, called HOMZ, betting that the country's persistent housing shortage, combined with higher demand fueled by demographics — millennials either buying homes or continually renting — will drive housing-related stock prices higher in the long run.
The Home 100 includes not only major homebuilders, which are tracked by such ETFs as SPDR S&P Homebuilders and iShares U.S. Home Construction, but also residential REITs, home improvement specialists and home financing, technology and service companies.
By design, the index includes companies with the potential to benefit from rising rents, appreciating home values and a persistent housing shortage, Hoya says.
The company characterizes U.S. housing as one of the largest asset classes in the world, totaling about $30 trillion, but also one that is beset by a lack of product and a relentless rise in costs.
Currently, residential fixed investment as a share of U.S. gross domestic product is just above 3%, according to the U.S. Census Bureau. The 70-year average for such investment is well above 4% of GDP, pointing to a shortfall in housing stock.
“This is taking the thematic investing theme to the next level,” Todd Rosenbluth, CFRA senior director of ETF and mutual fund research, told Market Watch. "Whether the investment case backs it up ... I’m not sure. The ETF graveyard is littered with interesting-sounding strategies.”
As of Thursday, HOMZ had 100,000 shares outstanding and $2.52M in assets.
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