This ETF Could Be a Winning Sector Bet in 2026

Core Viewpoint - The real estate sector and related ETFs have underperformed in 2025, but there are compelling reasons to consider REITs for investment in 2026, particularly through actively managed ETFs like the ALPS Active REIT ETF [1][2]. Group 1: Performance and Growth - As of December 9, 2025, the largest ETF dedicated to real estate was barely positive year-to-date, indicating a lack of excitement among investors [1]. - Despite disappointing performance in 2025, REITs have shown solid operational performance with year-over-year net operating income (NOI) growth of 5.2% and same-store NOI growth of 2.8% as of the third quarter [4]. - More than 60% of REITs reported positive year-over-year NOI growth, and over 50% had gains in same-store NOI, showcasing the sector's resilience [4]. Group 2: Balance Sheet Strength - REITs have maintained well-structured balance sheets with low leverage, which has been underappreciated by investors [3]. - The emphasis on fixed-rate debt and longer terms to maturity has limited REITs' exposure to rising interest rates, highlighting their focus on long-term investments [5]. - Actively managed funds like the ALPS ETF can quickly access REITs with superior balance sheets compared to index-based rivals [4].