Homebuilder ETFs rise as industry sentiment hits record high

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Exchange-traded funds with exposure to the residential construction industry outperformed the broader market Wednesday, after a report from an industry group showed sentiment was at a multi-decade high. The SPDR S&P Homebuilders ETF was up 1.5% in the late morning, while the iShares U.S. Home Construction ETF rose 2%. Despite their similar names, the two funds have some differences. The SPDR fund’s top five holdings – accounting for more than 21% of its portfolio – are companies that are involved with residential construction, like Whirlpool Corporation and Carrier Corp. , but not builders. In contrast, while the iShares fund has plenty of exposure to discretionary housing market names – Lowe’s Companies Inc. is its fifth-biggest holding, its top four are builders. Investors seem to prefer the latter approach: the iShares fund has gained 26.5% in the year to date, topping the SPDR fund’s 19% gain.
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