Hit Bottom on Home Capital? Try Shorting Canadian REITs
- REIT Index ETF dropped 3.1% since April 19; TSX fell 1.7%
- REITs hit by economic concerns, issues with business model
Hit Bottom on Home Capital? Try Shorting Canadian REITs
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As the fate of mortgage lender Home Capital Group Inc. hangs in the balance, investors are finding another way to play Canada’s potential housing slump: bet against real estate investment trusts.
The iShares S&P/TSX Capped REIT Index ETF has fallen 3.1 percent since April 19 -- steeper than the benchmark gauge’s 1.8 percent decline -- when regulators accused Home Capital of misleading investors, triggering a run on deposits and raising questions about its survival. Short interest on the ETF rose to a record 4 million on April 13 and was at 3.8 million or 4.6 percent of shares outstanding at the end of last month, according to the latest exchange data.