Ride the Construction Boom and “NAIL” Down This ETF – ETF Trends

Ride the Construction Boom and NAIL Down This ETF


The housing market continues to sizzle, prompting builders to ramp up construction. This gives traders an opportunity to play the Direxion Daily Homebuilders and Supplies Bull 3X Shares (NAIL).

One can look at luxury homebuilder Toll Brothers, one of NAIL’s holdings, to get the pulse of the hot homebuilding market. The company reported strong third-quarter earnings results last week.

“Luxury home builder Toll Brothers Inc. reported in its fiscal year 2021 third quarter earnings results on Tuesday (August 24) that the firm hit a new record for new contracts on the quarter, exceeding Q3 of last year by 35% when new contracts hit a previous all-time high,” a Fox Business article said.

A confluence of factors like low supply and even lower mortgage rates are helping to fuel the real estate market.

“We are very pleased with our third quarter performance,” Chairman and CEO Douglas C. Yearley, Jr. said in a statement. “Home sales revenues were up 37%, and pre-tax income and earnings per share more than doubled compared to one year ago. We are benefiting from our strategy of broadening our product lines, price points and geographies as we continue to grow our business, drive price, expand margins and improve our capital efficiency.”

“Demand continues to be very strong,” he added. “The housing market is being driven by many strong fundamentals, including low mortgage rates, favorable millennial-driven demographics, a decade of pent-up demand, low new home supply, and a tight resale market.”

NAIL seeks daily investment results of 300% of the daily performance of the Dow Jones U.S. Select Home Construction Index. The index measures U.S. companies in the home construction sector that provide a wide range of products and services related to homebuilding, including home construction and producers, sellers and suppliers of building materials, furnishings, and fixtures. The fund is up over 90% in 2021 alone.NAIL Chart

A Broader Real Estate Play

Traders looking for something less concentrated in real estate can opt for a broader sector play. Enter the Direxion Daily MSCI Real Estate Bull 3X ETF (DRN).

DRN seeks daily investment results equal to 300% of the daily performance of the MSCI US IMI Real Estate 25/50 Index. The index is designed to measure the performance of the large-, mid- and small-capitalization segments of the U.S. equity universe that are classified in the real estate sector as per the GICS.DRN Chart

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