INTERNATIONAL REITs SCORE
Not all REIT investment instruments are the same!
While US-based ETFs such as VNQ (Vanguard REIT ETF©) and RWR (SPDR Dow Jones REIT ETF©) continued to underperform since our ETF Strategist Tool captured significant deterioration in this particular segment that started between Apr 8 – 10, 2015, we also noticed that the“Ex-US” side of this segment representing international REIT companies and excluding US-based companies, has quickly emerged into the strongest leadership group during the same period.
In the price comparison chart below we can see that the IFGL ETF (iShares International Developed REIT ETF©) representing the “Ex-US” developed countries REIT index continued to outperform the US-based VNQ ETF,as well as the S&P 500©.
Source: Google Finance.
According to the QAS ETF Strategist database, IFGL successfully moved from Zone 3 (Early Stabilization) to Zone 1 (Positive, Strong) on April 8, 2015, precisely when all US-based REIT instruments shifted from Zone 2 (Positive, Maturing) to Zone 6- (Neutral, Negative Bias), thereby demonstrating some degree of deterioration. (See our article as of Apr 14, 2015, http://www.qas-service.com/e_publications.php).
Considering the exact date of the two events, we can assume that investors clearly started shifting their REIT exposure more toward international stocks and away from the US-based side of this industry. This was definitely an indication of the rotation inside a Global REIT segment.
See a snapshot from the QAS ETF Strategist tool below.
The current shift of IFGL ETF from Zone 3 to Zone 1 represents a high level of conviction (according to QAS Risk Zones Methodology) that this investment instrument has great potential for a further price advance in the near future.
The QAS ETF Strategist tool makes this type of “intra-sector” rotational research easy and fun. The search can be performed by asset class, region, area of interest as well as other options.
For more information on actionable rotation ideas please visit: http://www.qas-service.com/etf.html