ITB Tops 2012's Best-Performing ETF List
Meanwhile, PulteGroup, the $6.77 billion-in-market-cap homebuilder that’s also among ITB’s top 10 holdings, has seen its stock price shoot up 177 percent since the beginning of the year.
Homebuilding retailers such as Home Depot and Lowe’s are also among the fund’s top holdings, with the segment making up just over 12 percent of the mix.
Still Off The Highs
It’s worth noting that however impressive ITB’s run has been in 2012, the fund remains only a hint of what it once was during the golden days of the housing boom in 2006, right before home values peaked that summer and corrected sharply downward in a decline that stripped homes of more than two-thirds of their value.
The fund traded at its highest-ever mark—at $50.10 a share—on its very first week after inception in May 2006, and shortly thereafter started a decline that eventually led it to a closing price of just over $6 a share by March 2009. That 2006 peak to 2009 trough amounted to an 87 percent decline.
Since that March 2009 closing low of $6.40 a share, the fund has had its ups and downs every time the housing market flirted with a recovery before losing steam. Headed into 2013, the fund, which closed most recently at $20.70 a share, remains nearly two-thirds below its all-time high.
But recent price action suggests investors seem to think ITB now stands its first real chance at a rally in six years if the housing market indeed delivers on its promise of a recovery.
Be careful when making fruit-basket comparisons; you’re likely to come up with lemons.
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Pimco is going back to what it does best—generating alpha through fixed-income exposure.