The ALPS REIT Dividend Dogs ETF (RDOG) posted the strongest weekly gain among all ALPS funds over the past week, rising 4.3% as REIT consolidation activity drove strong returns in several top holdings.
Key Takeaways:
- RDOG posted the strongest weekly return among ALPS funds, gaining 4.3% over the past week.
- Tower operators SBA Communications and Crown Castle surged on acquisition interest and restructuring plans.
- The fund’s high-yield methodology often identifies REITs trading at discounts that become acquisition targets.
The fund’s equal-weight, high-yield strategy positioned it to capture value from M&A deals in the real estate sector. The methodology focuses on the highest-yielding securities within nine real estate segments, which often identifies companies trading at discounts that attract buyer interest, according to the fund’s factsheet.
SBA Communications Corp. (SBAC) led RDOG’s weekly gains with a 27.5% return after Bloomberg reported that the telecommunications tower operator is exploring a potential sale following preliminary takeover interest from infrastructure funds. The stock contributed 0.58% to the fund’s return, according to VettaFi.
Another tower operator, Crown Castle Inc. (CCI), added 5.8% during the week, according to VettaFi. The company unveiled a restructuring plan to focus exclusively on its tower business while reducing debt by $7 billion and launching a $1 billion share buyback program.
RDOG Holdings Capture M&A Wave
National Storage Affiliates Trust (NSA) gained 5.1% during the week, contributing 0.14% to returns, VettaFi data showed. The rally extended gains that began weeks earlier when Public Storage (PSA) announced in March that it would acquire the self-storage operator in an all-stock deal valued at $10.5 billion.
Among industrial REITs, LXP Industrial Trust’s (XLP) 7.6% weekly gain reflected investor enthusiasm for the company’s rent growth of 27% on new industrial leases, VettaFi data showed.
Hospitality REITs also contributed to performance. Summit Hotel Properties Inc. (INN) rose 5.9% as management projected strength from World Cup events in six key markets, while Americold Realty Trust Inc. (COLD) added 6.7% and Braemar Hotels & Resorts Inc. (BHR) gained 6.9%, VettaFi data showed.
The fund’s weekly outperformance came as the broader real estate sector gained momentum. The Morningstar U.S. Real Estate Index rose 2.7% during the first quarter while the broader U.S. equity market declined, with falling interest rates improving financing conditions for property companies, according to a recent Morningstar analysis.
See more: Some Real Estate Dividend Dynamos Found in This ETF
RDOG held 47 positions as of March 9 and charges 35 basis points in annual expenses, according to the fund factsheet.
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VettaFi LLC (“VettaFi”) is the index provider for RDOG, for which it receives an index licensing fee. However, RDOG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of RDOG.