For a considerable time, real estate investment has been a fundamental aspect of creating a well-rounded investment portfolio. Recently, Real Estate Investment Trusts (REITs) have become increasingly popular as a practical and effective avenue for investors to tap into the real estate market without the complexities of direct property ownership. Specifically, REIT ETFs present a convenient solution for investing in a diverse range of real estate assets, granting investors access to the earning possibilities and growth prospects within the real estate sector. These investment vehicles simplify the process, allowing individuals to participate in the real estate market's potential rewards while avoiding the hands-on management associated with physical property ownership.
Top Best REIT ETFs Funds in 2024
In 2024, there are good options for investing in real estate through REIT ETFs. This quick guide looks at some of the best ones to help you make smart investment choices.
A Comparison Table of the Best REIT ETFS
ETF Name | Ticker | Expense Ratio | AUM | Dividend Yield | 1-Year Return | Holdings |
Vanguard Real Estate ETF | VNQ | 0.12% | $50 billion | 3.5% | 18.2% | 184 |
iShares U.S. Real Estate ETF | IYR | 0.41% | $10 billion | 2.9% | 17.8% | 99 |
Schwab U.S. REIT ETF | SCHH | 0.06% | $7 billion | 3.1% | 19.5% | 104 |
Invesco S&P 500 Equal Weight Real Estate ETF | EWRE | 0.40% | $2 billion | 3.2% | 21.6% | 31 |
SPDR Dow Jones REIT ETF | RWR | 0.25% | $4 billion | 3.0% | 16.9% | 93 |
Fidelity MSCI Real Estate ET | FREL | 0.08% | $1.5 billion | 3.4% | 20.3% | 182 |
iShares Global REIT ETF | REET | 0.14% | $800 million | 4.1% | 22.7% | 300+ |
Global X SuperDividend REIT ETF | SRET | 0.58% | $400 million | 7.2% | 14.5% | 30 |
Schwab Global Real Estate ETF | SCHH | 0.12% | $1 billion | 3.8% | 19.8% | 300+ |
iShares Residential and Multisector Real Estate ETF | REZ | 0.46% | $3 billion | 3.3% | 18.9% | 101 |
Vanguard Real Estate ETF (VNQ)
Vanguard's Real Estate ETF (VNQ) commands attention with its impressive $50 billion AUM and a competitive expense ratio of 0.12%. Offering exposure to 184 holdings across various real estate sectors, including residential and healthcare, VNQ has established itself as a stalwart in the REIT ETF landscape. The fund's robust 1-year return of 18.2% and a steady dividend yield of 3.5% make it an appealing choice for investors seeking stability and consistent income in their portfolios. VNQ's sheer size and comprehensive diversification contribute to its reputation as a go-to option for those looking to navigate the dynamic real estate market with a well-established and reliable ETF.
iShares U.S. Real Estate ETF (IYR)
The iShares U.S. Real Estate ETF (IYR) stands out in the real estate investment landscape, offering investors a diverse and substantial investment opportunity with its $10 billion in Assets Under Management (AUM) and a reasonable 0.41% expense ratio. While slightly higher in cost, IYR compensates by providing exposure to a broad range of real estate segments through its portfolio of 99 holdings, which includes office spaces and residential properties. The ETF's strategic diversification contributes to its appeal for investors seeking a well-rounded real estate portfolio in the U.S. market. With a commendable 1-year return of 17.8%, IYR demonstrates its potential for capital appreciation, and a competitive dividend yield of 2.9% adds an income-generating component to the investment. This combination positions IYR as a solid choice for investors looking for a balanced and diversified approach to real estate, with the added benefit of long-term growth and income generation. The ETF's attractive features, including its diverse holdings and competitive returns, make it a compelling option for those navigating the complexities of the U.S. real estate market.
Schwab U.S. REIT ETF (SCHH)
Schwab U.S. REIT ETF (SCHH) distinguishes itself with a remarkably low 0.06% expense ratio and a $7 billion AUM, offering cost-effective exposure to the U.S. real estate market. With a focus on both income generation and capital appreciation, SCHH boasts a 1-year return of 19.5% and a dividend yield of 3.1%. The ETF's well-balanced portfolio of 104 holdings positions it as an attractive option for investors seeking steady returns without compromising on cost efficiency. SCHH's combination of low expenses and strong performance aligns with the goals of those looking for a cost-effective and reliable REIT ETF in the dynamic real estate sector.
Invesco S&P 500 Equal Weight Real Estate ETF (EWRE)
Invesco's S&P 500 Equal Weight Real Estate ETF (EWRE) adopts a unique strategy by equally weighting its 31 holdings within the S&P 500 Real Estate sector. With a 0.40% expense ratio and $2 billion AUM, EWRE offers a diversified exposure to both established and emerging real estate companies. The fund's competitive 1-year return of 21.6% and a dividend yield of 3.2% make it an intriguing choice for investors seeking a distinctive investment approach within the real estate space. EWRE's focus on mitigating concentration risk and delivering competitive returns positions it as an appealing option for those looking to diversify their portfolio with a differentiated REIT ETF strategy.
SPDR Dow Jones REIT ETF (RWR)
SPDR Dow Jones REIT ETF (RWR) makes its mark with a 0.25% expense ratio and $4 billion AUM, providing investors with exposure to a diverse range of real estate holdings. With a 1-year return of 16.9% and a dividend yield of 3.0%, RWR offers a balanced approach to income and growth within the real estate sector. The ETF's portfolio of 93 holdings spans various real estate segments, contributing to its appeal for investors seeking broad market coverage. RWR's competitive expense ratio and historical performance make it a compelling choice for those looking to capitalize on the opportunities present in the real estate market while maintaining a focus on cost-effectiveness.
Photo: Amir Hanna (Unsplash)
Fidelity SCI Real Estate ETF (FREL)
The Fidelity MSCI Real Estate ETF (FREL) distinguishes itself in the realm of real estate investment with its notable features. Boasting an impressively low 0.08% expense ratio and managing a substantial $1.5 billion in Assets Under Management (AUM), FREL provides investors with an efficient and cost-effective avenue for exposure to the real estate market. With a diverse portfolio comprising 182 holdings, the ETF offers a comprehensive representation of the real estate landscape. Notably, FREL showcases a compelling 1-year return of 20.3%, highlighting its potential for capital appreciation, and a commendable dividend yield of 3.4%, making it an appealing choice for income generation. The combination of FREL's competitive expense ratio and Fidelity's esteemed reputation for fund management positions it as an attractive and well-rounded option for investors seeking a cost-effective REIT ETF to complement their investment portfolio.
iShares Global REIT ETF (REET)
iShares Global REIT ETF (REET) distinguishes itself by offering investors exposure to the global real estate market with a 0.14% expense ratio and $800 million AUM. With a dividend yield of 4.1% and a 1-year return of 22.7%, REET presents an opportunity for investors to diversify their real estate holdings beyond the U.S. The ETF's expansive portfolio of 300+ holdings spans various geographic regions and real estate sectors, providing a comprehensive and diversified approach. REET's focus on global diversification and competitive returns make it an intriguing option for investors looking to broaden their real estate investments and tap into opportunities beyond domestic markets.
Global X SuperDividend REIT ETF (SRET)
The Global X SuperDividend REIT ETF (SRET) distinguishes itself in the real estate sector by placing a unique emphasis on high dividend yields, offering investors an income-oriented approach. Boasting a reasonable 0.58% expense ratio and managing an impressive $400 million in Assets Under Management (AUM), SRET stands out with a substantial dividend yield of 7.2% and a commendable 1-year return of 14.5%. With a carefully curated portfolio comprising 30 holdings, the fund places a spotlight on companies with a proven track record of attractive dividend payments. This characteristic makes SRET an enticing option for investors seeking consistent income, particularly those prioritizing a stable stream of dividends within their real estate investment strategy. The ETF's commitment to superdividends underscores its appeal for income-focused investors, presenting a compelling choice for those aiming to enhance their investment income within the dynamic landscape of the real estate market.
Schwab Global Real Estate ETF (SCHH)
Schwab Global Real Estate ETF (SCHH) offers investors exposure to the global real estate market with a 0.12% expense ratio and $1 billion AUM. With a 1-year return of 19.8% and a dividend yield of 3.8%, SCHH provides a well-rounded approach to global real estate investments. The ETF's expansive portfolio of 300+ holdings spans various geographic regions and real estate sectors, providing investors with a diversified and comprehensive approach to international real estate opportunities. SCHH's focus on global diversification, coupled with its competitive expense ratio and historical performance, positions it as a compelling option for investors looking to expand their real estate holdings beyond domestic borders.
iShares Residential and Multisector Real Estate ETF (REZ)
The iShares Residential and Multisector Real Estate ETF (REZ) distinguishes itself through its strategic focus on residential and multisector real estate, offering investors a targeted exposure to these specific segments. With a modest 0.46% expense ratio and a substantial $3 billion in Assets Under Management (AUM), REZ presents a well-balanced investment approach with a diverse portfolio comprising 101 holdings. Notably, the ETF's 1-year return of 18.9% and a commendable dividend yield of 3.3% underscore its potential for both capital appreciation and income generation within the unique residential and multisector real estate niches. This emphasis on specific segments, coupled with a competitive expense ratio, positions REZ as an appealing choice for investors seeking a more specialized approach to real estate investments. The ETF's commitment to these sectors aligns with the preferences of those looking to capitalize on the potential growth and stability offered by residential and multisector real estate opportunities in the market.
In a Nutshell
When considering investments in Real Estate Investment Trusts (REITs) in 2024, there exists a diverse array of options. Notably, Vanguard's VNQ stands out as a comprehensive choice, covering extensive areas, while alternatives like Global X SuperDividend REIT ETF (SRET) emphasize delivering robust dividends. Key factors to weigh include the expense ratio, which tells you how much it costs; assets under management, indicating the total invested amount; dividend yield, reflecting how much the investment pays back; and historical performance, showcasing past success. It's imperative to acknowledge that investing carries inherent risks, and seeking guidance from a financial advisor is prudent. They can offer personalized advice, ensuring your investment aligns with your financial goals and mitigating potential risks associated with market fluctuations.
Cover photo: Colton Duke (Unsplash)
