Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Hunt for Inflation-Fighting ETFs Is Boosting ‘REIT’
ETF Building Blocks Channel
Share

Hunt for Inflation-Fighting ETFs Is Boosting 'REIT'

Tom LydonJun 18, 2021
2021-06-18

Real estate investment trusts (REITs) have enviable history on their side when it comes to asset classes with reputations for damping inflation. That could prompt more investors to consider the ALPS Active REIT ETF (REIT).

Another reason the actively managed REIT deserves near-term consideration is that with inflation heating up, real estate assets are living up to their billing as inflation fighters. In the current quarter, the real estate sector is topping the S&P 500 by a margin of better than 2-to-1. REIT is getting in on that act. It’s up almost 16% this quarter, beating both the broader real estate sector and the S&P 500.

“Shares of office owner Boston Properties Inc. and data-center landlord Equinix Inc. already climbed 20% and 19%, respectively, since the end of March,” reports Karen Langley for the Wall Street Journal.

REIT is a semi-transparent exchange traded fund, meaning its holdings aren’t disclosed on a daily basis, but at the end of the first quarter, Equinix (EQIX) was the fund’s second-largest holding.

REIT 1 Year Performance

Pricing Power Matters

One of the top reasons REIT is a relevant consideration as the Consumer Price Index (CPI) rises, which it did noticeably in April and May, is that real estate companies have pricing power, meaning they can raise lease rates with little threat of backlash from tenants, particularly at the commercial level.

Look at REIT pricing power this way. A consumer products company, say Coca-Cola or Kellogg, may raise prices to combat higher commodities costs. However, consumers have alternatives and can buy store brands or off-label equivalents. However, when a commercial landlord raises rent, which is often baked into lease agreements, tenants usually don’t just pack up and move. Rent escalators are common in commercial real estate, and that’s the case regardless of inflation data.

Paltry bond yields are also boosting the case for REIT.

“Lackluster bond yields have made the real-estate segment’s dividend payments more appealing. The yield on the benchmark 10-year U.S. Treasury note settled at 1.569%,” reports Langley.

The ALPS ETF has returned 18% since its March debut, making it one of the better-performing funds in the category over that span.

For more on cornerstone strategies, visit our ETF Building Blocks Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X