Vanguard Real Estate ETF had its best week since 2017
The largest fund tracking real estate investment trusts, the Vanguard Real Estate ETF, or VNQ, took in $427 million during the week ended July 6, its biggest weekly inflow since January 2017, as the yield on 10-year Treasuries dropped four basis points to 2.82 percent.
The move was particularly notable because it was a four-day market week with the July 4 Independence Day holiday in the U.S. The inflows continued on Monday, with another $115 million pouring into the ETF.
REITs are highly interest-rate sensitive investments that are more attractive in falling environments because of their high yields. As 10-year Treasuries climbed from 2.4 percent in January to more than 3 percent in April and May, investors fled real estate, pulling more than $1.5 billion from the $32 billion VNQ over the first five months of the year. But with yields tumbling from 3.1 percent to 2.8 percent in six weeks, ETF buyers have found the sector attractive again.