The Hoya Capital Housing ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in yield exposure and volatility exposure compared with category peers. High yield exposure is attributed to holding more stocks with high dividend or buyback yields. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall affordable fees and continuity among portfolio managers. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Home Depot

Lowe's

PulteGroup

Toll Brothers

Welltower

KB Home

Meritage Homes

D.R. Horton

Lennar

Equity LifeStyle Properties

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. The Hoya Capital Housing ETF earns an Above Average Process Pillar rating. The leading factor in the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 100% also bolsters the rating. Lastly, the process is limited by its parent firm's subpar risk-adjusted performance, as shown by the firm's average overall Morningstar Rating of 1.0 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the Hoya Capital Housing 100 TM Index.  The index is a rules-based index composed of 100 companies that collectively represent the performance of the U.S. residential housing industry. Normally at least 80% of the fund’s net assets will be invested in real estate and housing-related companies. It will generally use a “replication” strategy to achieve its investment objective, and meaning it generally will invest in all of the component securities of the index in approximately the same proportion as in the index. 

 The portfolio is overweight in real estate and consumer cyclical relative to the category average by 30.8 and 24.1 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 9.7 and 9.5 percentage points of assets, respectively. The portfolio is composed of 102 holdings and is relatively concentrated. In particular, 19.1% of the strategy's assets are housed within the top 10 holdings, compared with the category’s 15.7% average. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

Above Average

Process

Hoya Capital’s team earns An Average People Pillar rating. The most notable contributor to the rating is the fund's structure. It tracks an index, which is helpful because historical data, such as Morningstar's Active/Passive Barometer, finds that index funds have generally outperformed their active counterparts, especially over longer time periods. The firm's five-year retention rate of 100% also strengthens the rating. Lastly, the rating is limited by the combined average three-year excess return of each manager, which indicates that the funds they manage have trailed their respective category average.

Average

People

Hoya Capital has some investor-friendly attributes, but other attributes warrant caution, leading to an Average Parent Pillar rating. An area of strength is the firm’s favorable fees for open-end and exchange-traded funds, demonstrating a firm-wide commitment to minimizing costs and maximizing investors’ returns. Fees for funds are, on average, within the lowest quintile of similarly distributed strategies. Hoya Capital has proven successful at retaining portfolio management talent, and providing continuity for strategies, as displayed by low turnover compared with peers since the firm's inception. The Hoya Capital roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as evidenced by its average overall Morningstar Rating of 1.0 stars.

Parent

Hoya Capital Housing ETF

HOMZ tracks a tier-weighted index of 100 equities representing the US residential housing industry.

Fidelity MSCI Real Estate ETF

First Trust S&P REIT Index Fund

iShares Cohen & Steers REIT ETF

Pacer Benchmark Industrial Real Estate SCTR ETF

iShares U.S. Home Construction ETF

iShares U.S. Real Estate ETF

Janus Henderson U.S. Real Estate ETF

Invesco KBW Premium Yield Equity REIT ETF

VanEck Mortgage REIT Income ETF

Direxion Daily Homebuilders & Supplies Bull 3X Shares

Nuveen Short-Term REIT ETF

Invesco Dynamic Building & Construction ETF

US Diversified Real Estate ETF

Invesco Active US Real Estate

iShares Global REIT ETF

iShares Mortgage Real Estate ETF

iShares Residential Real Estate ETF

IQ US Real Estate Small Cap ETF

Invesco S&P 500 Equal Weight Real Estate ETF

SPDR Dow Jones REIT ETF

Schwab U.S. REIT ETF

Global X SuperDividend REIT ETF

Pacer Funds Trust-Pacer Benchmark Data & Infrastructure Real Estate Sector ETF

iShares Core U.S. REIT ETF

Vanguard Real Estate ETF

SPDR S&P Homebuilders ETF

Real Estate Select Sector SPDR Fund

Alpine Global Premier Properties Fund

JPMorgan BetaBuilders MSCI US REIT ETF

DoubleLine Commercial Real Estate ETF

First Trust Alerian Disruptive

iShares International Developed Real Estate ETF

CBRE Global Real Estate Income Fund

Invesco Real Assets ESG ETF

NETLease Corporate Real Estate ETF

ALPS Active REIT ETF

SPDR Dow Jones Global Real Estate ETF

SPDR Dow Jones International Real Estate ETF

Vanguard Global ex-U.S. Real Estate ETF

iShares International Developed Property ETF

The history of construction spending since 1993 reveals that this data tends to weaken prior to recessions. For a recent dip in Residential Construction attributed to the rise in mortgage rates, this indicator is charging higher.

Construction Spending Rises

iShares U.S. Oil Equipment & Services ETF

SPDR S&P Transportation ETF

Advisorshares Restaurant ETF

The consumer price index increased 0.4% sequentially and 3.7% year over year in September.

4 Sector ETFs to Win on Sticky Inflation

Mortgage rates topped the highest level since November 2000 last week, and applications for home purchases tumbled to a multi-decade low.

High Mortgage Rates Pull Down Homebuilder ETFs

Look into Housing ETFs as high mortgage rates and low inventory levels cause headwinds for the market.

How Rising Rates Are Impacting Housing ETFs

iShares U.S. Medical Devices ETF

The annual inflation rate in the United States accelerated for a second straight month to 3.7% in August, above market forecasts of 3.6%.

5 Sector ETFs to Fight Sticky Inflation

First Trust Materials AlphaDEX Fund

Consumer Staples Select Sector SPDR Fund

Annual inflation rate in the United States accelerated to 3.2% in July 2023 from 3% in June.

4 Sector ETFs to Fight Sticky Inflation

iShares U.S. Insurance ETF

VanEck Vectors Retail ETF

Vanguard Financials ETF

iShares Global Timber & Forestry ETF

The U.S. home-building market exhibits a strong recovery of late, owing to the limited inventory and increased demand. This recovery should benefit some industries that are allied to the housing industry.

7 ETF Areas to Gain from a Rebounding Housing Market

The U.S. housing sector has shown immense improvement, with homebuilder confidence reaching its highest level in almost a year.

Homebuilder Confidence Hits 1-Year High: ETFs to Ride On

American Assets

Armada Hoffler Properties

Alexander's

Brookfield Asset Management

Brandywine Realty

Cambria Global Real Estate ETF

Boston Properties

City Office REIT

CIM Commercial Trust

Cousins Properties

Easterly Government Properties

Douglas Emmett

Elme Communities

Equity Commonwealth

Empire State Realty Trust

Franklin Street Properties Corp.

FlexShares Global Quality Real Estate Index Fund

Xtrackers International Real Estate ETF

Highwoods Properties

Hudson Pacific Properties

The new pariah of the commercial real estate sector, Office REITs, have remained in free-fall in recent months, plunging another 30% this year following a plunge of nearly 40% last year. Just how bad is it? The surge in interest rates has turned a weak-but-manageable situation into a bleak one, but there is more nuance than what the prevailing narrative would suggest.

Office REITs: The New Malls

Invesco DB Commodity Index Tracking Fund

VanEck Vectors Gold Miners ETF

SPDR Gold Trust

iShares Gold Trust

iShares Core S&P Total U.S. Stock Market ETF

SPDR S&P 500 ETF Trust

Technology Select Sector SPDR Fund

SPDR S&P Retail ETF

The annual inflation rate in the United States dropped to 4.9% in April 2023, the lowest since April 2021.

ETF Areas to Benefit/Lose from Cooling U.S. inflation

Blackstone Group

CBRE Group

Americold Realty

EastGroup Properties

First Industrial Realty Trust

Industrial Logistics Properties

Indus Realty Trust Inc

Jones Lang LaSalle

Nuveen Real Estate Income Fund

Lexington Realty

No slowdown here. After the worst year of performance on record in 2022, Industrial REITs have rebounded this year after earnings results showed a surprising re-strengthening of property-level fundamentals. Recent earnings results showed that demand continues to substantially outpace available supply. Rent growth reaccelerated in early-2023, with rental spreads averaging over 40%, while occupancy rates climbed to fresh record.

Industrial REITs: We Love Logistics

CubeSmart

Extra Space Storage

Home Appreciation US REIT ETF

Life Storage

Neuberger Berman Real Estate Securities Income Fund Inc

National Storage Affiliates Trust

InfraCap REIT Preferred ETF

Storage REITs are the best-performing property sector this year after lagging in late 2022, lifted by surprisingly solid earnings results and a thawing of the previously icy-cold housing market. Storage demand is driven largely by housing activity – specifically, home sales and rental market turnover - and the recent moderation in mortgage rates has eased concern of a deepening housing recession.

Storage Wars

American Tower

Direxion Daily Real Estate Bull 3x Shares

Direxion Daily Real Estate Bear 3x Shares

Realty Income Corp

Plymouth Industrial REIT

Public Storage

ProShares Short Real Estate

Rexford Industrial Realty

Cohen And Steers Total Return Realty Fund

Ryman Hospitality Properties

U.S. equity markets snapped a three-week winning streak while benchmark interest rates dipped to seven-month lows after a critical slate of employment data revealed some cracking in the long-resilient labor markets. Following its strongest weekly advance in five months, the S&P 500 finished fractionally lower this week, while the Mid-Cap 400 and Small-Cap 600 each posted steeper declines of over 2.5%.

Cracks Emerge In Jobs Market

With new home sales rising, the U.S. housing market is showing growth prospects

ETFs to Watch With New Homes Sales on the Rise

HOMZ is a very small real estate fund with just a $37mn asset base. Yield is low, but price growth over the years is quite decent.

HOMZ: A Low-Yielding Micro-Cap Real Estate Fund

The Spring selling season starts in March and lasts through May-June thanks to warmer weather after a chilly winter and buyers' inclination to move to a new house before the next school calendar starts.

Could Housing ETFs Spring Up in the Key Selling Season?

Apartment Income REIT Corp

Apartment Investment and Management

American Homes 4 Rent

AvalonBay Communities

BRT Apartments

Clipper Realty

Camden Property

Centerspace REIT

Essex Property Trust

Invitation Homes

Apartment REITs were the second-worst-performing property sector in 2022 - barely outperforming the troubled office sector - despite delivering a record year of operating performance highlighted by 20% FFO growth. Following two years of historic rent growth, there is little doubt that growth will moderate over the coming quarters. Market consensus sees a "hard landing" with rising vacancies and declining rents.

Apartment REITs: Tracking For Soft Landing

U.S. builder confidence has risen for the second consecutive month to the highest level since September 2022.

Homebuilder Confidence Rises Most in a Decade: ETFs to Tap

Despite delivering the strongest earnings growth of any property sector in 2022, Self-Storage REITs have stumbled of late amid a post-pandemic demand normalization and pressure from elevated supply growth. Storage demand is driven largely by housing activity – specifically home sales and rental market turnover. Rental market turnover finished 2022 near historic-lows while home sales also dipped to decade-lows.

Storage REITs: Downsized Demand

Airbnb

Ashford Hospitality Trust

Apple Hospitality REIT

Braemar Hotels & Resorts Inc

Booking Hlds

Carnival

Choice Hotels Int.

Chatham Lodging Trust

DiamondRock Hospitality

Expedia

Hyatt Hotels

Hilton Worldwide Holdings

Host Hotels & Resorts

Hersha Hospitality Trust Class A

Despite lingering recession concerns and recent travel disruptions, Hotel REITs have been among the better-performing sectors over the past year, buoyed by steady post-pandemic operating improvement fueling long-awaited dividend resumptions. Several years of pent-up leisure demand helped to offset a sluggish business and group travel recovery. Hotel revenues eclipsed record highs in 2022, but with wide dispersion between markets and segments.

Hotel REITs: Dividends Are Back

housing ETFs are gaining in prices (due to a fall in rates) in 2023 despite a continued decline in existing home sales.

Here's Why Housing ETFs Are Up in 2023 Despite Soft Sales

If I had to distill my current macro outlook down into a sentence or two it would be “watch everything housing related”. The CPI is still showing rents rising.

3 Things I Think I Think - Housing Risks

The U.S. housing market has suffered a lot this year. However, mortgage rates are falling lately.

Can Homebuilding ETFs Rebound Ahead?

Janus Henderson Mortgage-Backed Securities ETF

First Trust Low Duration Opportunities ETF

iShares MBS ETF

SPDR Portfolio Mortgage Backed Bond ETF

Mortgage rates have not been this high since before the housing crisis. And while the housing market is slowing, prices are still high.

High Mortgage Rates And High Inflation

News for Hoya Capital Housing ETF ETF (HOMZ)