Banks and REITs: Performance Still Diverging


Jun. 29 2015, Updated 1:10 p.m. ET

Weekly performance of REITs

REITs have been the best-performing subgroup within the Financial Select Sector SPDR Fund (XLF) recently, rising by 1.29% as of June 22, 2015. Since April, several of the REIT-based funds have lagged the performance of the broad-based S&P 500. For example, the Vanguard REIT ETF (VNQ), which rose by 1.72% in the past week, has fallen by 6.56% since April. Similarly, the Dow Jones US Select REIT Index (DWRTF) rose by 1.68% last week but fell by 6.83% in the same period. In contrast, the S&P 500 Index (SPY) has risen by 2.65% since April.

Year-to-date, the NAREIT Index has fallen by 2.85%. The top performing REIT was Equity Residential (EQR), which rose by 3.5% last week, while the worst-performing REIT, Macerich (MAC), fell by 5.23% in the same period.

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Banking stocks in XLF in line with banking indices

Banking stocks within the Financial Select Sector SPDR Fund (XLF) fell by 0.81% as of June 22, in line with the Dow Jones U.S. Banks Index, which fell by 0.7% last week. This year, the SPDR KBW Bank ETF (KBE) has risen by 10.7%, while XLF has risen by 2.4%. However, in the past week, KBE fell by 0.7%.

KBE tracks the returns of the S&P Banks Select Industry Index. The KBW Bank Index (BKX) has risen by 5.38% year-to-date and has outperformed the S&P 500 by ~325 basis points.

Asset management and custody banks such as State Street and the Bank of New York Mellon led this retreat, falling by 2.1% and 1.28%, respectively.

The only banks to close the week in the green were Capital One (COF) and Goldman Sachs (GS), which rose by a meager 0.97% and 0.06%, respectively.


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