Equity: U.S. Real Estate

NURE Top Performer Intra-day
Price $25.84
Today’s Change 0.00%(0.00)
4:00pm 08/17/2017
USRT Bottom Performer Intra-day
Price $48.58
Today’s Change -0.60%(-1.22)
9:59am 08/18/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

US real estate is a big draw in the ETF world: The segment hosts over $30B in assets. All the biggest fund issuers - and some of the smaller ones - have gotten in on the act, which makesSCHH and RWR track the same Dow Jones index for some interesting, and occasionally redundant, competition. The funds tend to fall into two main categories: traditional cap-weighted funds that offer access to a broad basket of REITs; and alternative funds with niche exposure to small caps, REIT sub-sectors and yield plays.

Many ETFs offer a more or less standard cap-weighted approach to the market, which can make it hard for any one fund to stand out in the crowd. Our Analyst Pick for the segment, VNQ, boasts deep liquidity, tracks an excellent index (and does it exceptionally well) and charges a very competitive expense ratio. The market has put its weight behind it, too: it leads the segment in AUM by far. SCHH has put up a strong challenging bid to VNQ with a tiny fee, a growing asset base and solid exposure. SCHH also challenges RWR head-to-head: Both funds track the same Dow Jones index. There are other strong competitors though. First Trust’s FRI tracks the most diversified real estate index and iShares’ IYR dominates in trading volume.

Among the alternative funds, there are some interesting strategies at play: iShares offered 3 funds that target real estate subsectors, but investor interest is uneven. Only REZ has a strong asset base. KBWY weights its stocks by dividend yield; ROOF holds just small-cap REITs; and PowerShares’ PSR eschews index tracking in favor of actively managing its holdings. These funds offer alternatives for investors with nuanced views on where real estate is headed, but generally don’t match the size and liquidity of the vanilla offerings. (Insight updated 08/17/17)

All Funds (18)

IYR $4.5 B 4497194170 Liquid but expensive to hold

A 97
E
88
88
T
99
99
F
97
97

FREL $391.06 M 391064670 N/A

A 94
E
96
96
T
95
95
F
94
94

VNQ $34.37 B 34366224894.6 Liquid and cheap to hold

A 87
E
95
95
T
97
97
F
87
87

SCHH $3.58 B 3580316993.25 very low holding cost

A 84
E
97
97
T
98
98
F
84
84

RWR $2.93 B 2929533612.5781 Liquid

A 84
E
93
93
T
97
97
F
84
84

ICF $3.25 B 3250488565 large and liquid

A 82
E
91
91
T
97
97
F
82
82

USRT $150.51 M 150506215 low fee

B 88
E
94
94
T
69
69
F
88
88

FRI $209.69 M 209691046.598 stable but not cheap to hold

B 85
E
87
87
T
97
97
F
85
85

REZ $412.6 M 412601600 decent AUM and liquidity

B 73
E
86
86
T
92
92
F
73
73

KBWY $342.5 M 342500400 Dividend-focused

B 47
E
91
91
T
80
80
F
47
47

PSR $27.82 M 27820450 Dear to hold; hard to trade

C 91
E
73
73
T
64
64
F
91
91

WREI $21.2 M 21196800 low AUM; low trade volume

C 85
E
82
82
T
44
44
F
85
85

ROOF $117.97 M 117967650 pricey

C 71
E
80
80
T
73
73
F
71
71

NURE $6.48 M 6482300 N/A

F 57
E
54
54
T
57
57
F
57
57

EWRE $27.53 M 27531000 new; trade with care

N/A 0
E
0
-1
T
0
-1
F
0
-1

XLRE $2.47 B 2469288982.3 new, trade with care

N/A 0
E
0
-1
T
0
-1
F
0
-1

RORE $9.28 M 9282480 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

FTY $67.13 M 67131400 not cheap

B 84
E
87
87
T
72
72
F
84
84

ETF.com Grade as 08/10/17

Equity: U.S. Real Estate

Performance Dispersion
Performance  [as of 08/16/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Thomson Reuters US Residential & Commercial REITs--------------
A 97.037658IYR4497194170IYRiShares U.S. Real Estate ETF0.16%3.62%5.87%-0.34%7.19%8.58%6.04%
A 94.213046FREL391064670FRELFidelity MSCI Real Estate Index ETF0.16%3.64%5.35%-0.49%------
A 87.045399VNQ34366224894.6VNQVanguard REIT ETF0.17%3.06%2.54%-3.46%7.43%9.21%7.35%
A 83.945409SCHH3580316993.25SCHHSchwab U.S. REIT ETF0.07%2.82%0.91%-4.85%7.16%8.74%--
A 83.895532RWR2929533612.5781RWRSPDR Dow Jones REIT ETF0.08%2.79%0.76%-4.93%7.02%8.59%6.38%
A 81.62669ICF3250488565ICFiShares Cohen & Steers REIT ETF0.46%2.79%3.10%-3.67%8.06%8.74%6.05%
B 88.368848USRT150506215USRTiShares Core U.S. REIT ETF-0.21%2.95%2.68%-2.28%7.37%8.27%6.40%
B 85.192468FRI209691046.598FRIFirst Trust S&P REIT Index Fund0.09%2.89%1.65%-4.60%6.71%8.55%6.27%
B 73.266972REZ412601600REZiShares Residential Real Estate Capped ETF0.09%1.74%5.67%0.15%10.02%10.06%8.56%
B 47.240484KBWY342500400KBWYPowerShares KBW Premium Yield Equity REIT Portfolio-1.78%2.14%1.16%2.27%10.20%13.01%--
C 91.416971PSR27820450PSRPowerShares Active US Real Estate Fund0.31%3.17%7.50%-0.74%8.06%8.95%--
C 85.247456WREI21196800WREIWilshire US REIT ETF-1.17%1.84%0.29%-5.90%6.86%8.62%--
C 71.231542ROOF117967650ROOFIQ US Real Estate Small Cap ETF-0.85%3.35%1.19%0.56%6.46%11.50%--
F 56.928748NURE6482300NURENuShares Short-Term REIT ETF0%2.13%4.57%--------
N/A 0EWRE27531000EWREGuggenheim S&P 500 Equal Weight Real Estate ETF0.52%3.59%4.77%-1.88%------
N/A 0XLRE2469288982.3XLREReal Estate Select Sector SPDR Fund0.71%3.82%7.02%-0.47%------
N/A 0RORE9282480ROREHartford Multifactor REIT ETF0.33%3.97%4.46%--------
B 84.031709760219FTY67131400FTYiShares Real Estate 50 ETF-7.53%-12.02%1.80%4.21%9.11%10.55%--
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

Differences in fees set funds apart in US real estate, as does closure risk from low assets.

The segment offers several extremely low-priced funds: Charles Schwab’s SCHHSCHH does a great job delivering its index with minimal costs and risks leads the pack with a segment low expense ratio. VNQ is also well-priced and RWR is also reasonable. These funds track their indexes well, with typical holding costs that are in line with their fees.

After that, things get a bit pricier. The iShares funds in the segment charge a bit more, leaving them much less competitive on price. Alternative funds (with the exception of KBWY) charge the highest fees, topped by PSR, though they hope to lure investors through their investment strategies, not on price alone. Tracking error tends to be less of an issue in this segment, as many of the funds hew tightly to their indexes, which is a plus to investors. All of the top-scoring funds (RWR, SCHH, and especially VNQ) track their indexes extremely well, but some funds, ROOF for instance, have wobbly tracking that makes costs of ownership harder to forecast.

There’s more concern regarding fund-closure risk, leaving WREI with high closure risk.

Still, the segment contains many funds, led by SCHH, which do a great job delivering their index with minimal costs and risks. (Insight updated 08/17/17)

All Funds (18)

97
96.989132
96
96.214592
95
94.951434
94
93.629664
93
92.930336
91
91.08071
91
90.54373
88
87.735586
87
87.424045
86
85.875376
82
82.285206
80
79.726855
73
72.622323
54
54.467845
N/A
0
N/A
0
N/A
0
87
86.921127334685

ETF.com Grade as 08/10/17

Equity: U.S. Real Estate

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
EWRE Guggenheim S&P 500 Equal Weight Real Estate ETF 0.40% -- -- -- 20.00% / 39.60% High 0
SCHH Schwab U.S. REIT ETF 0.07% -0.20% -0.08% -0.29% 20.00% / 39.60% Low 96.989132
FREL Fidelity MSCI Real Estate Index ETF 0.08% -0.16% -0.03% -0.31% 20.00% / 39.60% Low 96.214592
VNQ Vanguard REIT ETF 0.12% -0.09% -0.05% -0.19% 20.00% / 39.60% Low 94.951434
FRI First Trust S&P REIT Index Fund 0.49% -0.52% -0.43% -0.70% 20.00% / 39.60% Low 87.424045
WREI Wilshire US REIT ETF 0.32% -0.42% -0.33% -0.64% 20.00% / 39.60% High 82.285206
XLRE Real Estate Select Sector SPDR Fund 0.14% -- -- -- 20.00% / 39.60% Low 0
ICF iShares Cohen & Steers REIT ETF 0.35% -0.35% -0.30% -0.52% 20.00% / 39.60% Low 90.54373
RORE Hartford Multifactor REIT ETF 0.45% -- -- -- 20.00% / 39.60% High 0
IYR iShares U.S. Real Estate ETF 0.44% -0.54% -0.42% -0.70% 20.00% / 39.60% Low 87.735586
USRT iShares Core U.S. REIT ETF 0.08% -0.41% -0.18% -0.56% 20.00% / 39.60% Low 93.629664
KBWY PowerShares KBW Premium Yield Equity REIT Portfolio 0.35% -0.49% -0.29% -0.61% 20.00% / 39.60% Low 91.08071
NURE NuShares Short-Term REIT ETF 0.35% -- -- -- 20.00% / 39.60% High 54.467845
PSR PowerShares Active US Real Estate Fund 0.80% -- -- -- 20.00% / 39.60% High 72.622323
REZ iShares Residential Real Estate Capped ETF 0.48% -0.21% 0.13% -0.38% 20.00% / 39.60% Low 85.875376
ROOF IQ US Real Estate Small Cap ETF 0.70% -1.12% -0.86% -1.54% 20.00% / 39.60% Low 79.726855
RWR SPDR Dow Jones REIT ETF 0.25% -0.31% -0.25% -0.42% 20.00% / 39.60% Low 92.930336
FTY iShares Real Estate 50 ETF -0.41% -0.20% -0.57% 20.00% / 39.60% Low 86.921127334685

ETF.com Tradability Insight

US real estate has the incredibly dynamic range of liquidity that’s quite common in the ETF world. Funds range from incredibly liquid to barely trading.

Liquidity giants IYRFunds range from incredibly liquid to barely trading. and VNQ fall squarely in the first camp. The 2 funds trade hundreds of millions of dollars daily at extremely tight spreads. Volume like this is a boon to traders of all sizes from the fast money crowd to do-it-yourselfers.

A solid middle tier of funds also offers ample liquidity for most investors even though they’re not in the league of IYR and VNQ. These include ICF, RWR, SCHH and FRI, each of which trades well each day at reasonable spreads.

FNIO and WREI land at the bottom of the liquidity spectrum. Use care and skill to trade these funds as volume is quite thin. Some of these funds have decent spreads, but bear in mind that these are average inside quoted spreads, so larger market orders could sweep through the thin order book resulting in expensive execution. Use limit orders to stave off this outcome.

For larger investors, block liquidity is generally good, and it's evenly distributed across the range of funds. Creation costs are modest and underlying liquidity ranges from good to fair, with KBWY as the outlier. KBWY's concentrated stake in small- and microcap names gives it a large footprint in underlying markets, so price impact is a concern for creates/redeems. For funds like IYR and VNQ, underlying liquidity is a non-issue given their truly massive on-screen volume. (Insight updated 08/17/17)

All Funds (18)

99
98.95534
98
97.733722
97
97.489488
97
97.188207
97
96.998861
97
96.599427
95
95.173371
92
91.533826
80
80.350433
73
73.232943
69
68.968753
64
64.383948
57
56.91978
44
44.447741
N/A
0
N/A
0
N/A
0
72
72.240478731033

ETF.com Grade as 08/10/17

Equity: U.S. Real Estate

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
EWRE Guggenheim S&P 500 Equal Weight Real Estate ETF $67.11 K 0.19% 0.05 100.00% 0.05% 0.04% None 0
USRT iShares Core U.S. REIT ETF $370.05 K 0.34% 0.15 99.00% 0.05% 0.01% None 68.968753
FREL Fidelity MSCI Real Estate Index ETF $2.0 M 0.14% 1.65 99.00% 0.02% 0.04% None 95.173371
NURE NuShares Short-Term REIT ETF $0 0.38% 0.00 100.00% 0.11% 0.04% None 56.91978
FRI First Trust S&P REIT Index Fund $953.83 K 0.06% 0.82 99.00% 0.03% 0.04% None 97.188207
ICF iShares Cohen & Steers REIT ETF $12.88 M 0.04% 2.50 100.00% 0.21% 0.00% None 96.599427
IYR iShares U.S. Real Estate ETF $498.6 M 0.01% 124.66 100.00% 0.08% 0.01% None 98.95534
KBWY PowerShares KBW Premium Yield Equity REIT Portfolio $2.19 M 0.13% 1.17 100.00% 1.02% 0.03% None 80.350433
PSR PowerShares Active US Real Estate Fund $53.65 K 0.18% 0.01 100.00% 0.14% 0.01% None 64.383948
REZ iShares Residential Real Estate Capped ETF $1.62 M 0.12% 0.50 99.00% 0.21% 0.01% None 91.533826
ROOF IQ US Real Estate Small Cap ETF $405.98 K 0.15% 0.30 100.00% 0.21% 0.04% None 73.232943
RWR SPDR Dow Jones REIT ETF $11.63 M 0.05% 2.49 99.00% 0.13% 0.02% None 96.998861
SCHH Schwab U.S. REIT ETF $16.47 M 0.06% 7.99 99.00% 0.06% 0.01% None 97.733722
VNQ Vanguard REIT ETF $249.21 M 0.01% 29.64 99.00% 0.18% 0.00% None 97.489488
WREI Wilshire US REIT ETF $36.43 K 0.90% 0.01 100.00% 0.06% 0.02% None 44.447741
XLRE Real Estate Select Sector SPDR Fund $53.56 M 0.03% 33.14 100.00% 0.05% 0.03% None 0
RORE Hartford Multifactor REIT ETF $21.59 K 0.33% 0.01 100.00% 0.29% 0.03% None 0
FTY iShares Real Estate 50 ETF $258.39 K 0.10 100.00% 0.07% 0.01% None 72.240478731033

ETF.com/ Block Liquidity

FREL
5
4
3
2
1
FRI
5
4
3
2
1
ICF
5
4
3
2
1
IYR
5
4
3
2
1
REZ
5
4
3
2
1
RWR
5
4
3
2
1
SCHH
5
4
3
2
1
VNQ
5
4
3
2
1
XLRE
5
4
3
2
1
USRT
5
4
3
2
1
EWRE
5
4
3
2
1
KBWY
5
4
3
2
1
PSR
5
4
3
2
1
ROOF
5
4
3
2
1
WREI
5
4
3
2
1
RORE
5
4
3
2
1
NURE
5
4
3
2
1
FTY
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

Investors have their pick of funds tracking well-designed indexes that largely capture the market return and exposure of US real estate. They also can select from funds that take anThe mainstream funds here generally capture the real estate market for what it is alternate or narrower view of the space.

The mainstream funds here generally capture the real estate market for what it is: a short list of big names (Simon Property Group, American Tower, Public Storage) with dominant market caps, and a large concentration in commercial and residential REITs (a combined 55% of the market roughly) and specialized REITs which include REITs related to anything from hospitals and hotels to railways.

Vanguard’s VNQ tracks the comprehensive MSCI US REIT Index and earns a very high score, but IYR edges it on better balance across the REIT sub-sectors. First Trust’s FRI offers the most diversified portfolio in US real estate, while large-cap-oriented FTY also scores delivers excellent coverage with far fewer names. RWR and SCHH, which both track the Dow Jones U.S. Select REIT Index, earn solid scores as well.

The alternative funds generally don’t capture the market return, nor do they aim to. A low Fit score merely indicates the degree to which they vary from our benchmark in exposure and performance. PowerShares’ KBWY shoots for yield and tilts very, very small along the way, with a large chunk of assets devoted to small- and microcaps. ROOF skews even smaller than KBWY, but it does so with clear purpose. Both funds have high yielding portfolios at present, but their small-cap bias has amped up volatility too.

Other ETFs depart from broad market exposure by parsing the sub-sectors of US real estate—with mixed results. iShares’ REZ, ostensibly a residential real estate fund, suffers for its unexpected sector tilts: The fund has larger portion of assets allocated to specialized REITs than residential REITs. It’s really an ex-commercial REIT play.

Probably the biggest surprise here is that the actively managed fund PSR fits the market quite well, on par with vanilla index-tracking funds. That leaves big questions about what exactly PSR is buying you. The caveat: As an actively managed fund, PSR’s fit to the market could change overnight. (Insight updated 08/17/17)

All Funds (18)

97
97.037658
94
94.213046
91
91.416971
88
88.368848
87
87.045399
85
85.247456
85
85.192468
84
83.945409
84
83.895532
82
81.62669
73
73.266972
71
71.231542
57
56.928748
47
47.240484
N/A
0
N/A
0
N/A
0
84
84.031709760219

ETF.com Grade as 08/10/17

Equity: U.S. Real Estate