Allocation Advice and Alternatives

The struggle of brick-and-mortar real estate has extended into investment portfolios. Elevated inflation and high interest rates have weighed on the real estate sector over the past few years. Real estate investment trusts or REIT ETFs have not been spared. Yet these exchange-traded funds are popular among income investors. They generate cash and can help diversify a portfolio. So, where do they fit in yours? And which REIT ETFs do Morningstar analysts consider top picks? Dan Sotiroff is the associate director of US Passive Strategies for Morningstar. Dan is also the editor of Morningstar’s ETFInvestor newsletter.

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On this episode:

00:00:00 Welcome

00:01:26 Basics of REIT ETFs 

00:04:34 Active vs. Passive REIT ETFs

00:06:03 REIT ETFs’ Performance vs US Stock Market

00:09:20 Cutting the Tax Bill on REIT ETF income  

00:10:06 Top REIT ETFs From Vanguard & Schwab

00:13:48 Key Takeaways for Income Investors

Watch more from Morningstar:

How to Make the Most of Your IRA in 2026

3 Winners and 3 Losers from Emerging-Market Funds’ Big Rally

How New Retirees Can Spend More Without Risking Their Savings

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