High-interest rates are keeping the residential real estate market in flux. This is due to borrowing costs making prospective buyers and even sellers think twice. However, the murky waters of real estate investments in the current economic times can be made easier to navigate with an ETF like the ALPS Active REIT ETF (REIT).
As its name explicitly states, REIT invests in real estate investment trusts. This allow for dividends to be derived from the fund. This gives an income component to REIT, with its current indicated yield of 4.07% (as of October 18) and a 30-day SEC yield of 3.14% (as of September 30).
Additionally, as its fund description also states, the fund is actively managed. This allows for pliability in the real estate market. That is almost imperative given the amount of market uncertainty amid high interest rates.
The fund can be flexible in the market because of its active management. As such, the fund can tilt toward specific companies that are able to provide profitable opportunities in niche corners of the real estate market.
Thriving in an Uncertain Real Estate Market
Two companies able to capitalize on these niches include Equinix and Simon Property Group. Both firms are the top two holdings in REIT currently.
As the world becomes more data-driven and internet-reliant, Equinix focuses on this specific aspect of real estate. In this case, digital infrastructure.