Assessment of the Real Estate and Commodity ETFs Performance Factors

Abstract

With the continuous development of the financial market, many financial products have also emerged. ETFs are financial products that have gradually developed and grown in this underground. ETFs are a new type of fund with general funds' professionalism and market characteristics that can be traded like stocks. The main objective of this work is to assess the performance factors affecting real estate and commodity ETFs. We first collect real estate and commodity ETF market price data for 108 months from January 2012 to January 2021 and simultaneously collect data on various possible influencing factors during the same period. Next, we find out the factors that impact the market price of real estate and commodity ETFs through the models. Finally, we will have a deeper understanding of the future trend of US real estate and commodity ETFs. We found that in the same market environment, real estate ETFs and commodity ETFs have different price trends. For example, the price of real estate ETFs is rising from 2012 to 2021, while the price of commodity ETFs is declining during the same period, and its trend is more volatile. Therefore, we conclude that the factors affecting the prices of real estate ETFs and commodity ETFs are different. The diploma work suggests that medium risk appetite investors who cannot put too much effort into investing can invest part of their funds in US real estate ETFs. Some of these investors are more likely to pursue higher risk and returns. These investors can invest the number of their funds in US commodity ETFs.