Real Estate Market Case Shiller ETFs almost here

Getting closer to reality: Yesterday Bob Shiller's firm MacroMarkets announced that they've cleared the final approval for their exchange-traded funds based on the Case Shiller Index.

I've written in the past how huge this is. You can finally stem your real estate losses in a falling housing market. Or you can bet on the return of the market. And it's as easy as buying a stock on e-trade.

From the press release

MacroShares Major Metro Housing will provide investors with much needed access to the housing asset class, allowing for investment in either the upward or downward movement of home prices. The securities are designed to track the change in U.S. Home Prices as measured by the closely-followed S&P/Case-Shiller Composite-10 Home Price Index through the termination date. The paired securities will have a ten year term and will feature a 2x (200%) leverage factor.

...

Robert Shiller, co-founder and Chief Economist of MacroMarkets noted, "As recent events have proven, our global economy will benefit from modern, transparent, market based risk management solutions. Ongoing private sector innovation remains a vital complement to governmental efforts to modernize and protect our financial institutions, and I am confident that MacroShares will help meet a key 21st century economic challenge: delivering greater market access, new price discovery and liquidity to real estate."

Case Shiller based options and futures have been listed on the Chicago Merc for several years now. But the mechanics of that trade and account system have made it virtually impossible for anyone outside of Wall Street (aka the "End Users") to take advantage.

The funds are scheduled to IPO November 3. They'll trade with NYSE:UMM (which goes up when home prices go up.) and NYSE:DMM (which goes up when home prices decline)

These are unique financial instruments. In particular they don't own any real estate assets. This is not like a Gold ETF that buys gold and keeps it in an Amsterdam warehouse. Rather these funds hold cash (or treasuries). The cash moves from one to the other depending on the movement in the underlying Case Shiller 10-city composite. There are other peculiarities of these things too, but suffice it to say that these are the simplest, most direct way (only way?) to make money in real estate without going out and buying physical property. More complete review is here.

Obvious disclaimer: don't take my advice about financial instruments or investing.