“Building” A Base, Pun Intended:
The homebuilding group has been on the ascent. But not each of the major ETFs in the space is equal. First of all from a performance standpoint the XHB has acted better high by 42% over the last one-year period while the ITB rose by 28%. Looking at the distance between the two from their recent peaks the XHB is also superior just 4% from it while the ITB is 7% off its own highs. But are the “pure-play” homebuilders about to make a strong push upward? Peering at the top holdings in each ETF the XHB is more “equal-weighted” if you will. Its number one component is FND, a home improvement play just below 4%. Whereas the ITB’s top 4 holdings are all actual home builders in DHI LEN NVR and PHM which make up 43% of the fund (DHI and LEN make up 28% alone). If one thinks the pure-play homebuilders, as opposed to periphery plays, are about to lead, the chart below of the ITB is for you. There is a nice mix of other “non-homebuilders” plays in the XHB sporting nice charts including JCI CARR and ALLE.