“Accept No Substitutes” (or Proxies)
No, “Which companies are in S&P’s Homebuilders ETF?” isn’t a, “Who’s buried in Grant’s Tomb?” question.
It turns out that a majority of stocks in the index don’t make homes — they make the things that go in them.
That includes bed manufacturer** Tempur Sealy (3rd largest position); carpeting giant Mohawk Industries (#4); and Home Depot (#10).
Beds, Carpeting & Appliances
Is that broader exposure to the housing market a good thing for investors?
Search me.
You’d certainly guess that there’s a (very) strong correlation between companies that sell appliances, furniture, carpeting, security 
systems, etc. and the overall housing market (more specifically, new construction).
But, investors who — for whatever reason — want a pure play on (new) housing can simply buy the biggest, publicly-traded builders: Pulte, D.R. Horton, Toll, Lennar, etc.
P.S.: Somehow, it just doesn’t sound right to call Tempur Sealy a “bedmaker.” 🙂
