NEW YORK (CNNMoney) — When is a homebuilder not a homebuilder? When it’s in an index of homebuilder stocks, of course!
The SPDR S&P Homebuilders (XHB) exchange traded fund has surged this year, leading many to speculate that the housing market has really, honestly, we’re not fooling around this time, cross our hearts and hope to die, bottomed.
The builders ETF is up a stunning 26% already this year. But here’s the thing. A big chunk of the companies in the fund that are doing well are not really builders.
Shares of Select Comfort (SCSS), manufacturer of the popular Sleep Number beds, is up more than 50% this year. It makes up 3.3% of the fund’s assets.
The ETF, which tracks the S&P Homebuilders Select Industry index, also includes many companies that have ties to the housing market, but whose fortunes may be improving for reasons beyond what’s going on with real estate in the U.S.
Consider Whirlpool (WHR,Fortune 500). The appliance manufacturer makes up about 3.5% of the ETF’s weighting. Shares are up more than 60% this year. But is it really because of optimism about the U.S. housing market? ”