Real Estate Select sector SPDR ETF ETF (NYSEARCA: XLRE) cut down 2.83% in the second quarter on the back of a tender April, while the broader S&P 500 index gained 4.1%.

The fund saw a pullback in April as market participants cut their interest rates significantly lowered expectations due to hawkish Fedspeak and XLRE withdrawal 8.63% for a month.

The next two months brought relief, but not enough to make up for April’s losses. The index increased by 5.17% in May and 0.76% in June, after incoming economic data rekindled hopes for an interest rate cut.

XLRE saw inflows of $69.01 million in the second quarter compared to $484.73 million the quarter before.

The biggest loser and decliner was the consulting firm CoStar Group (CSGP). 23.25% from the end of the first quarter. Meanwhile, healthcare REIT Ventas (VTR) stood out as a winner by advancing 17.73%.

Subsector Results

Real estate management and development fell the most among sub-sectors, falling 16.98% from the previous quarter. They were followed by industrial REITs, which lost 13.76% valuable.

Health care REITs and housing REITs were the winners, with their number increasing by approx 11.37% AND 8.75%appropriately.

Top 5 Real Estate Companies in the S&P 500 Index

• Sales (VTR) +17.73%
• Iron Mountain (IRM) +11.73%
• Well Tower (WELL) +11.57%
• AvalonBay Communities (AVB) +11.49%
• Essex Estate Fund (ESS) +11.19%

The worst five real estate companies from the S&P 500 index

• CoStar Group (CSGP) -23.25%
• Weyerhaeuser (WY) -20.94%
• Prologis (PLD) -13.75%
• Host Hotels & Resorts (HST) -13.06%
• SBA Communications (SBAC) -9.41%

What analysts expect

“The REIT sector offers opportunities and growth potential. Offices and apartments remain the biggest players, and serious problems have arisen in this area. However, areas such as healthcare, industrial, multifamily and data centers are seeing significant growth,” said Seeking Alpha author Sungarden Investment Publishing.

“While I see the potential for rates to fall, I’m not sure they’ll stay low. Alternatively, they could continue to fall, but for the ‘wrong reasons’ due to the recession. If that’s the main reason rates are falling, the stock doesn’t look so good overall,” the author said, raising XLRE from Sell to Hold.

“XLRE is an entry-level fund for investors looking for exposure to real estate companies. “XLRE is primarily focused on equity REITs, adding exposure to smaller real estate companies to round out the portfolio,” a REITer’s Digest contributor told SA with a Buy rating for the ETF.

South African analysts rate the fund an average of Buy.

What do quantitative measures say?

The SA Quant Rating System rates the Real Estate Select Sector SPDR Fund ETF as Hold with a score of 2.78 on a 5-point scale.

The system assigns the ETF a C+ for Momentum, A for Expenses, C- for Dividends, D+ for Risk and A+ for Liquidity.