FYI: ( For a discussion on SRLV scroll down to davidmoran's post, "seeking a little alpha around SP500 --- XRLV"
With the Federal Reserve's plans for multiple interest rate increases widely known heading into 2018, it wouldn't have been surprising to see the rate-sensitive real estate sector lag.
Indeed, the MSCI US Investable Market Real Estate 25/50 Index is lagging the S&P 500 on a year-to-date basis, but over the past six months (a period that includes a rate hike), that real estate index is up more than 13 percent.
In theory, rate-sensitive sectors, including real estate, should see increased volatility as interest rates rise -- that hasn't been the case this year. Actually, volatility has been waning in the real estate sector, prompting increased exposure to the group for some low volatility exchange traded funds, including the Invesco S&P 500 Low Volatility ETF SPLV, -0.40%
SPLV tracks the S&P 500 Low Volatility Index, a collection of the 100 S&P 500 members with the lowest trailing 12-month volatility. The index is rebalanced in February, May, August and November. Following the recent August rebalance, the low volatility benchmark's real estate exposure increased.
Regards,
Ted
