Given that the pressures of inflation haven’t exactly slowed down, real assets are emerging once more as an option for investors seeking potential safe havens. Not only do real assets tend to perform well amid rising prices, but investing in them can help curate a more diversified portfolio.

Key Takeaways:

• While some real assets have struggled to pick up steam throughout 2026, this has not been the case for real estate.
• The Dow Jones US Select REIT Index grew 12.4% through Q2 2026, powered by the AI buildout, reshoring, and homeownership, among others.
• The State Street Real Estate Select Sector SPDR ETF (XLRE) offers low-cost exposure to the real estate sector, paired with a great year-to-date track record.

That being said, the conflict in Iran has made some real assets a relatively tough sell in the near-term. Some precious metals have seen their prices battered, and energy prices have whipsawed while the Strait of Hormuz remains closed.

However, while all of this was occurring, one real asset in particular was bucking the trend: real estate. In Q2 2026, the Dow Jones US Select REIT Index rose 12.4%.

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Now, why may this be happening? Part of it is likely due to the strong structural drivers of real estate demand this year — many of which remain firmly in place. These drivers include a rigorous AI buildout, ongoing reshoring efforts, and homeownership costs, among others.

This gives real estate a potent use case —- both as a defensive real asset play, and also as a long-term vehicle of growth. Advisors and investors looking to take advantage of this trend may want to tilt more heavily into real estate exposure within their portfolios.

Riding the Real Estate Tailwinds With XLRE

The State Street Real Estate Select Sector SPDR ETF (XLRE) can help folks looking to tackle this opportunity. For the cost of only eight basis points, XLRE invests in many of the companies within the real estate sector of the S&P 500. This includes a variety of REITS: specialized REITS, healthcare REITS, retail REITS, and many more.

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Most importantly, XLRE is cruising through the year with a strong report card. As of July 31, 2026, the fund is up 10.78% year to date.

These results are particularly important for XLRE’s blended investment case. The fund’s YTD returns show that it’s performing well amid the geopolitical uncertainty of the Iran War. Meanwhile, the fund is still in a great position to tap into the favorable long-term real estate trends.

Whether it’s for near-term defense and diversification or long-term growth, the real estate sector is proving to be a versatile home for both approaches. And given that folks can pick up targeted exposure through a low-cost ETF wrapper these days, it’s easier than ever to make sure one doesn’t miss out on an opportune trend like this.

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