If you want to follow a specific index like the housing sector, you may want to consider purchasing an exchange-traded fund or exchange-traded fund, which is an investment product that consists of bonds, stocks or other assets, similar to a mutual fund. ETFs are easy to purchase and are publicly traded.
David Auerbach, managing director of Armada ETF Advisors, said that an investor could own a couple of ETFs but they could also own hundreds of stocks inside a couple of names.
He said that the Home Appreciation Imagine owned a share of the S&P 500 ETF by the ArmadaETF. One share of an ETF equals exposure to 500 different stocks. According to Auerbach, an advantage of ETFs over mutual funds is that they are publicly traded during market hours.
He explained that an investor doesn't know what his mutual fund is worth until the end of the day when the fund's value is posted online, while ETFs have a constant bid ask spread and trade like a stock.
ETFs are bundled so you can own real estate sector stocks.
Armada ETF Advisors invests in publicly traded real estate investment trusts, known as REITs. A REIT is an entity or company that is responsible for income-producing real estate. Auerbach says that REITs that are traded on an exchange are like stocks.
He said there are currently 30 REITs in the S&P 500. Any investor can throw a dart against the board and pick their favorite. The advantage of an ETF wrapper gives investors the opportunity to play 25, 100, 250, 500 stocks in one stock and only have to pay potential capital gains losses on one security, according to Auerbach.
He said that we are leveraging our deeply experienced REIT management team to make sure all investors can benefit from the team's wisdom and experience as stewards of their funds since all we know are REITs.
In addition, Auerbach noted that the ETF wrapper is fully transparent so investors can see what all of its holdings are and what the bid ask spread is constantly during market hours compared to a mutual fund.
Armada is taking a big picture of what is happening in the housing markets across the country. There are several REIT sectors that benefit from this housing demand based on the lack of supply for all the demand out there, according to Auerbach.
Some people may not be able to buy a house, but everyone is able to buy a tax-efficientETF that is playing into this topsy-turvy housing situation, Auerbach said. As the only pure-play active Residential REITETETET with a deeply experienced REIT management team, we are able to provide residential REIT expertise that all investors can benefit from through thorough top-down and bottom-up analysis.