There’s no shortage of real estate ETFs for advisors and investors to consider. With Federal Reserve’s interest rate policy still in flux, market participants may want to consider an active approach to real estate equities. The ALPS Active REIT ETF (REIT ) is among the ideas for investors to consider at the intersection of active management and real estate investment trusts (REITs).
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Undoubtedly, this ETF’s status as an actively managed fund appeals now that the real estate sector is perking up. That gets into another point, though. Yes, the sector at large is showing signs of life. But that doesn’t mean the passive pure beta ETFs in the category are ready to meet the moment.
Indeed, as with any sector, some real estate stocks outperform their peers. The ALPS ETF holds several of the names some experts believe among the best real estate stocks to own. That group includes warehouse REIT Americold Realty Trust (COLD), which is one of the largest owners of temperature-controlled warehouses.
“While fundamentals will likely experience another decline in 2026, the long-term consolidation story for the sector is intact. The firm should be able to achieve mid-single-digit net operating income growth in the upcoming decade,” noted Morningstar’s Kevin Brown.
More Compelling Members of the REIT Roster
Confirming the advantages of active management relating to real estate stocks, REIT isn’t constrained at the industry level. That means it can venture to the corners of this sector offering opportunity. With the right amount of selectivity, that includes residential real estate names such as AvalonBay Communities (AVB).
“The company’s funds from operations per share are more than 20% above prepandemic levels, and over the long term, we expect demand for the company’s portfolio to drive long-term same-store NOI growth and FFO growth above inflationary levels,” added Brown.
Wireless tower REIT American Tower (AMT), which also has some data center exposure, could be another contributor to upside for the ALPS ETF.
“We like that the firm has pulled back on acquisitions over the past three years, as opportunities to invest at good returns have been limited. If the market opens up, American Tower has the balance sheet strength to buy assets, but we expect it to remain focused on internal growth and share repurchases for the time being,” observed Morningstar’s Michael Hodel.
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