This Real Estate ETF Has the Foundation for More Upside
After a lengthy run of disappointment, real estate investment trusts (REITs) and the related ETFs are notching some impressive performances this year, with the largest ETF in the category higher by 11%.
Proving active management brings benefits to the real estate sector, the ALPS Active REIT ETF (REIT) is higher by more than 17% year-to-date. REIT’s status as an active ETF is all the more important, because it’s more than just data center REITs propelling sector gains in 2026, and investors are pondering how much upside real estate stocks can deliver into year-end.
Confirming it’s not data center-dependent, REIT is getting a lift this year from Welltower (WELL), which is the ETF’s largest holding at a weight of 9.65%.
“The largest REIT in the US market as of mid-2026, Welltower…focuses on senior housing. It enjoys demographic tailwinds, specifically demand from the aging baby boom generation,” noted Dan Lefkovitz of Morningstar. “But it’s also well-positioned to benefit from the Affordable Care Act given its cost and quality advantages. Welltower’s share price gained more than 30% for the first seven months of the year.”
Multiple Contributors to REIT Upside
Confirming the benefits of active management and a focused lineup, the ALPS ETF has other non-data center contributors to its 2026 success, including mall REIT Simon Property Group (SPG). That stock is the ETF’s fourth-largest holding, commanding a weight of 5.15%.
“The mall operator recently posted its highest rent growth in a decade. Simon’s high-end retail properties have recovered from the pandemic-driven downturn in brick-and-mortar shopping,” added Lefkovitz.
Impressively, the notoriously rate-sensitive real estate sector and ETFs such as REIT are notching gains as the Federal Reserve appears highly unlikely to cut rates this year. Some bond market observers argue the Fed is boxed into a corner and may be forced to raise borrowing costs to ward off inflation. Even with lack of clarity from new Fed Chairman Kevin Warsh, REIT has barely budged over the past month, potentially signaling a surprising level of rate resilience.
“While lower rates could eventually provide a catalyst, REITs have shown in 2026 that they can thrive regardless,” concluded Lefkovitz. “In recent years, they have faced a range of challenges, including remote work, e-commerce, and home-sharing services. Tough times can improve operating efficiency. REITs may have emerged stronger from their challenging spell.”
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