One of 2024’s more significant stories, data center construction boomed amid a blockbuster year for AI. AI is not likely to go away anytime soon and with Federal deregulation of areas like crypto likely amid broader positive macro trends, data center construction could continue to grow. Of course, with risks also present, finding the right route stands out as a key goal. The active ETF REIT targets U.S. REITs that meet its standards and, with its flexibility, could appeal therein.
See more: Look to Quality ETF OUSM to Lead the Way into 2025
REIT, the ALPS Active REIT ETF, launched in February 2021. Charging 68 basis points (bps), the active ETF invests in common equity of U.S. real estate operating companies, preferred equities of U.S. REITs, and other real estate operating firms. Applying its proprietary methodology, the strategy holds notable REIT firms like Prologis, Inc. (PLD) but also intriguing names like Host Hotels & Resorts, Inc. (HST).
Together, that has helped the active ETF REIT to return 32.25% over the last year per SS&C ALPS Advisors data. Looking at the ETF’s tech chart on YCharts, it may offer an intriguing entry point as the year begins. Specifically, the ETF’s price recently entered oversold territory and remains near that point. Should that continue, it could signal a local bottom for its price, providing a ramp that the fund can ride amid positive trends.
Those trends in 2025 may include the lagging impact of rate cuts. Further, data center construction may rely on cheaper borrowing costs to expand. In 2024, data centers crossed new frontiers, with buildings built in multi-story buildings and even mines. Risks like trade wars may loom, but an active ETF like REIT can adjust to find the best opportunities. Taken together, REIT may offer a route into a potentially positive, alternative-friendly market segment this year.
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