ETF Education Report: ALPS ACTIVE REIT ETF (REIT)

What this ETF is trying to do

The ALPS ACTIVE REIT ETF (ticker: REIT) is an exchange-traded fund that focuses on Real Estate Investment Trusts, often called REITs. Instead of buying just one building or company, this ETF holds many different companies that own real estate.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

• Price return only tracks how much the share price changed.

• Total return includes both the price change and any cash payments (distributions) made to investors.

For this ETF, the numbers show:

• Year-to-Date (YTD): The price return is approximately 8.19%, while the total return is approximately 10.69%.

• One Year: The price return was approximately 6.94%, and the total return was approximately 10.27%.

• Three Years: The price return was approximately 26.71%, and the total return was approximately 39.39%.

To give you an idea of price movement, the current price is $28.42. The estimated price from roughly one year ago was approximately $26.58.

Income and distribution explanation

This ETF pays out cash to investors, which is called a distribution. The distribution yield is approximately 3.07%. This means the cash payments represent about 3.07% of the current share price. These distributions usually happen four times a year (quarterly), often on Thursdays.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. It is important to watch for this if you are looking for steady income. For this ETF, the erosion-risk score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this fund.

Top Holdings

This ETF holds a variety of companies. Because the list provided is partial, these are only the largest holdings:

• WELLTOWER INC (10.11%)

• PROLOGIS INC (8.92%)

• EQUINIX INC (8.32%)

• SIMON PROPERTY GROUP INC (4.71%)

• ESSEX PROPERTY TRUST INC (4.34%)

• W.P. CAREY INC (4.18%)

• MACERICH CO (3.95%)

• EQUITY LIFESTYLE PROPERTIES INC (3.93%)

• SABRA HEALTH CARE REIT INC (3.29%)

• TERRENO REALTY CORP (3.16%)

Please remember that holdings can change over time.

Pros

• The ETF has shown positive price returns and total returns over the last year and three years.

• It provides regular cash distributions (income).

Cons

• Like all investments, the share price can change, and past performance does not guarantee future results.

Beginner takeaway

When looking at the ALPS ACTIVE REIT ETF, notice that the total return is higher than the price return. This happens because the total return includes the cash distributions paid to you. Always remember that a high distribution yield is not the same thing as total return.