What to Know About Active REIT ETFs

On Feb. 4, 2025, Cohen & Steers launched its first three active exchange-traded funds: Cohen & Steers Real Estate Active ETF CSRE, Cohen & Steers Preferred & Income Opportunities Active ETF CSPF, and Cohen & Steers Natural Resources Active ETF CSNR. Cohen & Steers is the oldest and largest investment shop devoted primarily to listed REITs and other real assets, so its move into this growing space is significant.

As Morningstar’s Stephen Welch recently highlighted, active ETFs have been one of the hottest areas of the retail investing world lately, thanks to their tax efficiency and (usually) cheap price tags. Within REIT investing, though, active ETFs have so far remained a niche. Even so, they can be a useful way to get exposure to specific areas of the REIT market or to get active REIT exposure in a cheap and tax-efficient way. Here’s a look at what’s available.

ETF Clones of REIT Mutual Funds

A few REIT ETFs are clones of actively managed REIT mutual funds, with the same strategy and largely the same portfolio (allowing for slight differences owing to flows). This group includes the two largest active ETFs in the space, the $2.2 billion Dimensional Global Real Estate ETF DFGR and the $1.3 billion Dimensional US Real Estate ETF DFAR, which are clones of DFA Global Real Estate Securities DFGEX and DFA Real Estate Securities DFREX, respectively.

Like other DFA funds, those funds do not track an index, but they are managed similarly to an index fund, with market-cap-weighted portfolios that provide broad exposure to the US and global REIT markets. Also like other DFA funds, they’re cheap, so in this case there’s not much difference in price between the ETF and mutual fund versions. Dimensional Global Real Estate ETF’s expense ratio of 0.22% is 0.01 percentage point less than the corresponding mutual fund, but Dimensional US Real Estate ETF costs 0.19%, 0.01 percentage point more than the mutual fund version.

Fidelity Real Estate Investment ETF FPRO is a clone of Fidelity Real Estate Investment FRESX. Because of that, it’s semitransparent, meaning that its full portfolio is disclosed monthly like the mutual fund rather than daily like most ETFs. Fidelity Real Estate Investment ETF is a fairly typical actively managed REIT strategy in which Steve Buller maintains a portfolio of 40-60 stocks using a combination of bottom-up and top-down analysis. The two vehicles track each other pretty closely. As of Dec. 31, 2024, 39 of the ETF’s 42 stock weightings were within 0.15 percentage point of the mutual fund’s weightings. The ETF’s 0.59% expense ratio is lower than the mutual fund’s 0.65%, but not particularly cheap as ETFs go.

ETF Variants of REIT Mutual Funds

Another group of active REIT ETFs are similar to mutual funds run by the same team but with some differences in strategy or portfolio construction. (For the most part, they are fully transparent, with daily portfolio disclosure.) The new Cohen & Steers real estate active ETF falls into this category. It’s run by the same team as Cohen & Steers Realty Shares CSRSX and has a similarly sized portfolio of 30-45 stocks. However, up to 30% of its portfolio can be in non-US real estate stocks, real estate debt, options, and similar investments, while the mutual fund can’t have more than 3% of its assets in such things. The ETF also costs 0.70%, lower than the 0.88% price tag of the mutual fund’s I and L shares, which have the bulk of strategy assets.

Similarly, Invesco Active US Real Estate ETF PSR is managed by the same team as the corresponding mutual fund, Invesco Real Estate IARAX, using a similar approach. However, the ETF is more concentrated, holding 25-30 stocks (versus 35-40 in the mutual fund), and about 15% of its holdings are not in the mutual fund’s portfolio. Principal Real Estate Active Opportunity ETF BYRE is also more concentrated than its mutual fund counterpart Principal Real Estate Securities PRRAX. Its portfolio is mostly a subset of the mutual fund’s but with a significantly higher allocation to cell-tower REITs.

Stand-Alone REIT ETFs: Broad-Based

Quite a few active REIT ETFs stand on their own and don’t correspond to any mutual fund or similar vehicle. The largest of these is the $548 million Avantis Real Estate ETF AVRE, launched in 2021 by the ETF arm of American Century. That firm already had a real estate mutual fund, American Century Real Estate REACX, but the ETF is managed under Avantis by a different team. That team includes several veterans of DFA, and they run the Avantis funds programmatically, similar to what DFA does.

Other stand-alone active ETFs with a broad mandate include Cambria Global Real Estate ETF BLDG, ALPS Active REIT ETF REIT, JPMorgan Realty Income ETF JPRE, and Janus Henderson US Real Estate ETF JRE. The latter ETF is managed by a subset of the team that has run Janus Henderson Global Real Estate JERIX since 2007; when Janus launched a US-only REIT strategy from that team in 2021, it did so in ETF form only.

Stand-Alone REIT ETFs: Specialized

Finally, there are some ETFs that focus on specific niche areas of the listed real estate market, which may have limited options for indexes to track. Sustainable investing shop Vert Asset Management advises Vert Global Sustainable Real Estate ETF VGSR, which maintains a portfolio of real estate companies with positive environmental, social, and governance characteristics, based on academic research. Invesco Real Assets ESG ETF IVRA uses proprietary ESG screens in maintaining a portfolio of real asset stocks, mostly REITs but also including some utilities, energy, and basic materials.

Residential REIT ETF HAUS, as its name implies, invests in REITs that hold apartments and other residential properties, a niche within a niche. SRH REIT Covered Call ETF SRHR holds a concentrated portfolio of about 25 REITs, which it supplements with covered call options that are intended to boost income. Its 12-month yield of 6.91% is among the highest of any active real estate ETF, but its 0.75% expense ratio is also one of the highest in the group, blunting the advantage of the high yield.