Housing Chain
The mortgage-rate trade expressed through equities: builders, building products, HVAC, tools, and home-improvement retail. The most rate-sensitive real-economy chain in the index.
+2.0% 20d vs S&P 500
Macro & Rates Thematic basket
Homebuilders
The pure-play mortgage-rate beta: production builders buying down rates to clear inventory, move-up and luxury mix, the entry-level spec machines, manufactured housing at the affordability floor, and the spun-out land bank that finances the land-light model. Housing-chain tracks the whole ecosystem; this basket isolates the builders themselves, where the margin cycle and the rate trade express first and hardest.
1 day-0.2%basket return
20 days-1.1%basket return
20 days vs S&P 500-1.2%relative return
Year to date-11.7%basket return
Performance
Follow the theme against the wider market.
HomebuildersS&P 500
Series before each basket's creation date are a backtest of the membership as of creation; live tracking starts at creation.
| Return | 1 day | 5 days | 20 days | 60 days | MTD | YTD | 1 year |
|---|---|---|---|---|---|---|---|
| Basket | -0.2% | +1.4% | -1.1% | -4.9% | -2.2% | -11.7% | -18.9% |
| vs S&P 500 | +0.9% | +3.3% | -1.2% | -8.3% | -2.5% | -21.4% | -29.7% |
Risk statistics
Period
1y · 2025-10-16 – 2026-10-16 · 252 / 252 sessions
Sharpe ratio-0.52Annualized · 0% risk-free rate
Sortino ratio-0.79Annualized · 0% downside target
Historical volatility30.7%Annualized · daily log returns
Basket total returns · Annualized using 252 trading sessions · 0% risk-free rate and downside target. As of 2026-10-16 · close.
How these statistics are calculated
Risk methodology
Sharpe: average daily simple return divided by its sample standard deviation, multiplied by √252. The risk-free rate is assumed to be 0%; this is not a cash-adjusted ratio.
Sortino: average daily simple return divided by downside deviation, multiplied by √252. Downside deviation is the square root of the average squared shortfall below 0%, counting all sessions, including zeros for gains.
Historical volatility: √(252 × average squared daily log return), matching the Vol page’s realized-volatility convention. This differs from the sample standard deviation used in Sharpe.
Each period requires complete history and at least 5 sessions. MTD and YTD follow the calendar; 1y is 252 sessions. Missing data or an undefined ratio displays — with a reason. Short periods can produce unstable ratios; intraday snapshots include a partial session. History before this basket’s creation is backtested. If a new basket has no stored daily return series yet, estimates from its rounded published chart levels are marked ≈.
Inside the basket · 4 stocks
Current members and the reasoning behind each inclusion. Returns are for individual holdings.
| Why it’s included | Added | |||||
|---|---|---|---|---|---|---|
| LENLennar | Asset-light pivot post-Millrose spin | -0.8% | +0.5% | +1.5% | -23.3% | 2026-07-21 |
| DHID. R. Horton | Volume leader — the rate-buydown machine | -0.1% | +3.3% | +1.0% | -2.4% | 2026-07-21 |
| PHMPulteGroup | Move-up and active-adult mix with the group's best margins | +0.5% | +1.3% | -3.2% | -2.5% | 2026-07-21 |
| NVRNVR, Inc. | The land-light archetype: options, not ownership | -0.4% | +0.3% | -3.8% | -18.8% | 2026-07-21 |
How this basket is built
Equal-weighted; monthly rebalance, buy-and-hold between rebalances; dated membership changes reset the target weights.
Tracked since 2026-07-21. Membership decisions are documented below.
Read the methodology →Reading the returns
Basket returns include dividends. “vs S&P 500” compares the basket’s compounded growth with the benchmark’s. Green means positive; red means negative.
Cross-checked against ITB. Daily return correlation: 0.97 across 1707 sessions. the builder-heaviest listed proxy (~half pure builders, plus products and retail); XHB is pinned to housing-chain
Membership history & changes
Membership history
- create
Initial composition: 16 names — S&P 500 production builders (DHI, LEN, PHM, NVR), the off-index builder cross-section (TOL, TMHC, KBH, MTH, GRBK, CCS, LGIH, MHO, DFH), manufactured housing (SKY, CVCO) and the Millrose land bank (MRP). TOL is tagged broad, consistent with its tagging in housing-chain. Reference pinned to ITB. Considered and excluded: TPH (absent from the current FW 3000 data — revisit at the next reconstitution), BZH and HOV (smallest, most levered builders — this basket reads the rate cycle, not the credit tail), LSEA (acquired), and the products/installer chain (IBP, BLD), which stays in housing-chain.