like bluefire said, the SRS basically returns 2x the inverse of the DJ real estate index (IYR). it's only been around since feb 1st and since then it is up 20%. in that same period, the IYR has been down 10%. so there's a limited track record but it's essentially the easiest way to make a double-down bet on commercial real estate going in the tank. i don't believe they are actually trading in any securities other than IYR swaps. does anyone know how much volume there is in these swaps? my only fear might be when commercial RE goes in a tailspin then you get money pouring into the etf combined with potential difficulty finding the other side of the swap making it difficult to maintain the 200% inverse track record.
just my opinion for what its worth, despite a 10% decline this year, they have barely given back any of their ridiculous gains in the past few years. what's keeping a floor on REITs is that cap rates haven't gone up since there are no comps. NAV estimates from most analysts in this sector are far too high. it seems that the market has already taken into account this first round of NAV declines since REITs are trading at a discount to NAVs right now. that might suggest that the next wave declines in the private sector might not affect REITs the way you'd expect. in the long run though i think the SRS is a nice play if they can really maintain the benchmark.
