ALPS Active REIT ETF Tilts Into Data Centers, Senior Housing
ALPS Active REIT ETF raised weights in data-center, senior-housing and logistics REITs, cut office exposure to 2.79% and lists Equinix, Welltower and Prologis as top holdings.
The ALPS Active REIT ETF increased its allocations to data-center, senior-housing and logistics real estate investment trusts and reduced exposure to office properties to 2.79%, according to the fund fact sheet. The fund’s largest holdings include Equinix at about 10% of the portfolio, Welltower near 9.3% and Prologis around 9.25%.
Sector weights as of March 31 show technology REITs at 18.08% of the fund versus 15.19% in the S&P U.S. REIT Index, and hotel REITs at 8.11% versus 6.02% for the index. Office REITs account for 2.79% of the fund compared with 3.67% in the index, according to the fact sheet.
The allocation follows a framework published by SS&C ALPS Advisors that links REIT returns to broader economic drivers. The report notes housing and commercial real estate together represent roughly 15% to 18% of U.S. GDP. The report also explains that public REITs generally avoid corporate tax if they distribute at least 90% of taxable income to shareholders.
GSI Capital Advisors, the fund’s sub-adviser, applies a four-step process to build the portfolio. The team estimates expected returns, adjusts weights for prevailing economic trends, compares REIT income yields with bond yields and monitors valuations on an ongoing basis. The fact sheet shows the process has produced higher weightings in technology-related REITs, senior housing and logistics while limiting office exposure.
The fund reported near 15% year-to-date returns. SS&C ALPS’s analysis lists correlations that indicate how public REITs interact with other asset classes: about 0.60 correlation with equities and about 0.35 with bonds.
The report cites specific demand drivers for the favored sectors. Data-center REIT demand is linked to cloud growth and rising data consumption. Senior-housing landlords are affected by demographic aging. Logistics and industrial real estate are influenced by sustained e-commerce activity and supply-chain adjustments. The report identifies remote-work adoption and changing corporate space strategies as factors weighing on office demand.
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