Thursday, January 15, 2009

ETF Pick of the Week: SRS

Zerohedge has invested its collective $0.69 (this by the way is also our disclaimer that we are unabashedly pushing our book) in the SRS ETF. SRS is an ultra short fund, double inverse tracker of the Dow Jones U.S. Real Estate Index. We would post the links that disclose the current state of the U.S. residential and commercial mortgage markets but frankly unless you have been living in 740 Park for the past 2 years, you should have an idea by now.
Technicals are sweet, with this baby hitting $260 the last time Citi was at this price so there is some nice post short squeeze upside... Top 10 Index constituents of the 79-company fund, are such future DIP hunters as Simon Property Group (7.76%), Vornado Realty (4.69%), Public Storage (4.56%), Equity Residential (4.31%), Boston Properties (3.99%), ProLogis (3.87%), HCP (3.59%), Plum Creek (3.08%), Kimco Realty (2.90%) and Avalonbay (2.71%). The P/E ratio as given by proshares is 15.89x, and a 5.28% dividend yield... We would probably recommend selling once it hits the low to mid 200s for a nice 3x return. Start buying.

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