XLRE Real Estate ETF: 3.2% Below Its 10-Month SMA

XLRE sits 3.2% below its 10-month SMA; a close back above 42.27 would re-establish the uptrend; relative strength vs SPY is weak.

Trend & Momentum

The Real Estate Select Sector SPDR Fund rolled below its long-term trend, trading at $40.91, 3.2% below its 10-month SMA at $42.27. Price crossed below its 10-month SMA in September. Recent returns softened, with 3M at -6.3% after the prior 3-6M leg rose +8.2%; 6M is +1.9%, 12M is +0.5%, and 1M is -6.5%. Over the past 12 months, XLRE rose to its 12-month high of $46.07 on July after its 12-month low of $38.79 on December 2025. 1Y realized volatility is 15.6% against a 3Y average of 16.5% (z-score -0.2). Volatility is close to its cycle norm. Price back above the 10-month SMA would confirm trend recovery.

Relative Strength & Market Sensitivity

XLRE trails the benchmark, and the gap widened. The XLRE/SPY ratio, indexed to 100 at October 2021, stands 9.1% below its 10-month ratio SMA, and its ratio average is down 1.5% over three months. The ratio trails by 42.9% since the base. Relative returns stay weak across the cycle, with excess return at -8.5% over 3M and -13.1% over 12M. After its 12-month ratio high on February, the ratio crossed below its 10-month SMA in August and is now at its 12-month low on September. The ratio’s swing highs stepped lower.

Risk & Macro Sensitivity

XLRE has market-linked downside with weak return quality, with 3Y beta at 0.87 and 3Y Sortino at 0.51. XLRE’s 3Y correlation to Long Treasuries TLT is 0.79. TLT is 7.2% below its 10-month SMA. XLRE’s 3Y correlation to the US Dollar Index DXY is -0.53. DXY is 2.3% above its 10-month SMA.

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Romain Gandon
CEO, Quantlake

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results.