House price ETF´s Macroshares Major Metro Hsg Up / Down started trading today

http://www.marketwatch.com/investing/stock/umm

http://www.marketwatch.com/investing/stock/dmm

Shiller said the decline in housing prices may be less steep by year-end. “At this rate, it’ll be down 12 percent and I suspect it will be down less than that because of the improvement that we’re seeing,” Shiller said.

The Case-Shiller index has been falling for the last three years. The gauge declined by 0.6 percent on a monthly basis in April, the smallest monthly drop in the index since June 2008.

Shiller said that the MacroShares Major Metro Housing Indexes might help avoid future upheavals in the housing market, by allowing investors to hedge against falling home prices.

“This economic crisis is substantially due to a failure to manage risk adequately,” he said. “This is an opportunity to manage these risks.”

The MacroShares Major Metro Housing Up, an exchange-traded fund that tracks the cumulative change in the S&P/Case-Shiller Composite-10 Home Price Index, started trading today on the New York Stock Exchange with a value of $20 at 11:51 a.m. New York time.

The MacroShares Major Metro Housing Down, which allows investors to take the opposite position, betting that home prices will fall, traded today at $30.97.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTz.RbR1robw

 

Was wondering when these were going to start trading, they have been talking about these ETFs for months now.

Would have been nice to have this ETF back in 2006-2007 during the boom, now its pretty much useless trade at the moment.

 

As the high price homes foreclose this will provide a lift to the case shiller index by distorting the average. These ETFs and the index might provide a misleading signal of the health of the housing market

 

How soon until these are unlisted?

I like the idea of trading home prices, but am skeptical of these "paired ETFs". Didn't those paired crude oil predecessors die out due to low volume?

 

The DCR and UCR pair ceased trading in (approx) June 2008, because crude oil had 3 consecutive closes above $111.

The current pair is DOY and UOY, and although trading volume is light, the two ETFs still exist.

 

Glad to hear it. House prices have to go up in the long run for the economy to recover, and govt will find a way to make this happen eventually. I'm not saying the time to get in is right now, but I would like to be able to play my expectation for rising house prices without the hassles of owning property. At some point in the not-too-distant future, I plan to get long UMM.

Bettles

 

I think this is odd. I interpret stock as fractional equity ownership in a business. I think of an ETF as a portfolio of stocks and fractional equity ownership in a collection of businesses. This UMM DMM ETF is not backed by anything. There is no underlying asset.

 

UMM owned and boned

 

There are/were futures contracts for several cities and an overall average but I believe they trade by "appointment only".

 

All the better for these two things to be "pushed around" easily.