Where lies the future of the real estate sector? Yes, it’s facing challenges to its commercial side as remote work puts an end to office buildings’ hustle and bustle. However, residential real estate and REITs offer some positive signs. That helps build the case for investors to consider an active real estate ETF, especially one showing technical indicator support.
Why invest in real estate? Real estate offers benefits like long-term appreciation and reliable rental income to curious investors. Whether in broader real estate firms or via real estate investment trusts (REITs), real estate adds some solid income and even inflation hedging to portfolios. Real estate also offers a solid choice for diversification away from your standard 60/40 stock and bond portfolio, as well.
What’s more, real estate isn’t struggling as much as one would think right now. Yes, as mentioned earlier, commercial real estate is having a hard time. Rental REITs, though, are starting to pick up, reporting so-called “stellar” earnings. Despite struggling on a one-year basis, they’ve perked up over the last month, according to the FTSE Nareit U.S. Real Estate Indexes.
See more: “Like Real Estate? Eye REIT Strategies RDOG, REIT”
The ETF to watch in this case, the ALPS Active REIT ETF (REIT), is nearing a key buy signal. REIT’s price briefly rose above its 200-day simple moving average (SMA) of $24.50 on Friday. While it has dropped back down since then, REIT is within touching distance of that indicator that its momentum is shifting.
REIT charges 68 basis points to actively invest in not only REITs but also real estate companies more broadly. That not only lets it access the benefits of steady REIT income, but also adds diversification into the rest of the real estate sector overall. REIT has returned 3.4% YTD compared to 1.8% for the Vanguard Real Estate ETF (VNQ), for example. REIT also offers a 2.7% annual dividend yield, and stands out as an active real estate ETF to consider.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
