Last week’s plunge in interest rates was a boon for the biggest real estate ETF.

The largest fund tracking real estate investment trusts, the Vanguard Real Estate ETF (VNQ), took in $427 million during the week ended July 6, its biggest weekly inflow since January 2017, as the yield on 10-year Treasurys dropped four basis points to 2.82%. The move was particularly notable because it was a four-day market week with the July 4 Independence Day holiday in the U.S.

Vanguard plans to expand its application of blockchain in early 2018.

The inflows continued this week, with another $115 million pouring into the ETF.

REITs are highly interest-rate sensitive investments that are more attractive in falling environments because of their high yields. As 10-year Treasurys climbed from 2.4% in January to more than 3% in April and May, investors fled real estate, pulling more than $1.5 billion from the $32 billion VNQ over the first five months of the year. But with yields tumbling from 3.1% to 2.8% in six weeks, ETF buyers have found the sector attractive again.

Funds best positioned for volatility
These funds have the smallest beta scores, either positive or negative, indicating the least variability from market returns.

“Longer-term trends are very much tied to rates and specifically the 10-year treasury yield,” Bloomberg Intelligence analyst Jeffrey Langbaum said. “Right now, the investor view is that the 10-year is sitting comfortably below 3 percent and REITs can do OK in that type of environment.”

Bloomberg News