## [# 5 Top Performing US Focused Real Estate ETFs](/sections/news/5-top-performing-us-focused-real-estate-etfs) # 5 Top Performing US Focused Real Estate ETFs Real estate has been in focus with the upcoming sector change. Here we take a look at the best performers in the space this year. [![sumit](/sites/default/files/styles/author_image_icon/public/2023-03/Sumit_0.png?itok=SO-7S5SH "sumit")](/authors/sumit-roy) [By Sumit Roy ](/authors/sumit-roy) Aug 26, 2016 Edited by: Sumit Roy [ + Follow ](/etf/login) Share Email LinkedIn Facebook X (Twitter) googletag.cmd.push(function() { googletag.display('js-dfp-tag-article_page_302x26'); }); Loading In less than a week, real estate will break away from financials to become the 11th and newest sector under the Global Industry Classification Standard (GICS). The move elevates real estate to a prestigious position within the stock market, though its impact on the way people invest may be limited. (See: **[What The New Real Estate Sector Means For ETFs](https://www.etf.com/sections/features-and-news/what-new-real-estate-sector-means-etfs "What The New Real Estate Sector Means For ETFs")**) Known for their hefty dividends and growth potential, real estate stocks―and in particular, real estate investment trusts (REITs)―have always been attractive to income-orientated investors, and that will remain the case. Technically, the new real estate sector under GICS will consist of two industry groups: equity REITs, and real estate management and development companies (mortgage REITs will remain a part of the financials sector). However, as it stands now, of the 28 stocks in the S&P 500 that will be in the real estate sector, 27 are REITs. In the S&P Midcap 400, 37 of 39 real estate stocks will be REITs, and in the S&P SmallCap 600, 28 of 31 real estate stocks will be REITs. In other words, the new real estate sector will be so overwhelmingly REITs that it is essentially a REIT sector. **Real Estate Sector Is REITs** For ETF investors, that means buying a U.S. real estate sector ETF is little different than buying a REIT ETF―both funds will be predominantly REITs. That said, there are many differences between the various [U.S. real estate ETFs](https://www.etf.com/topics/real-estate-etfs) and [REIT ETFs](https://www.etf.com/topics/reit-etfs) out there. This year's top U.S. real estate ETF, for example, is up 29.3%, while the bottom-performing ETF in the segment is up only 7.7%. Not all of these ETFs adhere to the GICS, and some don't even track an index. The No. 1 performer, the [PowerShares KBW Premium Yield Equity REIT Portfolio (KBWY)](https://www.etf.com/KBWY), holds small and midcap REITs, and weights them by dividend yields. The result is an ETF that currently has a juicy 6.9% 30-day SEC yield. Likewise, the No. 2 performer, the [IQ Real Estate Small Cap ETF (ROOF)](https://www.etf.com/ROOF), also focuses on smaller-cap companies by holding REITs in the bottom 10% of the market capitalization of the industry. ROOF currently has a SEC yield of 4.6% and is up 19.2% year-to-date. **Largest Real Estate ETF Doing Well** The top two U.S. real estate ETFs of the year are both focused on smaller companies, but large-cap-heavy funds are doing well also. The [Vanguard U.S. REIT Index Fund (VNQ)](https://www.etf.com/VNQ), the largest real estate ETF by far, with more than $35 billion in assets, is up 14% this year. Its yield of 3.4% isn't as large as that of the small-cap REIT ETFs, but is backed by a much broader portfolio that covers essentially the whole U.S. REIT universe. VNQ is also dirt-cheap, with a 0.12% expense ratio. That's much cheaper than the next-best-performing fund in the segment, the [First Trust S&P REIT Index Fund (FRI)](https://www.etf.com/FRI), with a 0.48% expense ratio. FRI, up 13.5% year-to-date, also covers the broad REIT sector, but it follows a S&P index, as opposed to the MSCI index tracked by the aforementioned VNQ. It has a 30-day SEC yield of 3.1%. Also tracking a MSCI index is the [Fidelity MSCI Real Estate Index ETF (FREL)](https://www.etf.com/FREL), with a gain of 12.8% to-date. A relatively new entrant into the space, FREL is a real estate sector fund; that means in addition to REITs, it includes real estate management and development companies (as negligible as they may be in terms of weighting). It's also the second-cheapest fund in the segment, with an expense ratio of 0.08%, while its yield of 3.3% is in line with similar ETFs. For a full list of year-to-date returns for U.S. real estate ETFs, see the table below: TickerFundYTD Return (%)[KBWY ](https://www.etf.com/KBWY)[PowerShares KBW Premium Yield Equity REIT Portfolio](https://www.etf.com/KBWY)28.96[ROOF](https://www.etf.com/ROOF)[IQ US Real Estate Small Cap ETF](https://www.etf.com/ROOF)19.07[VNQ ](https://www.etf.com/VNQ)[Vanguard REIT Index Fund](https://www.etf.com/VNQ)13.94[FRI](https://www.etf.com/FRI)[First Trust S&P REIT Index Fund](https://www.etf.com/FRI)13.6[FREL ](https://www.etf.com/FREL)[Fidelity MSCI Real Estate Index ETF](https://www.etf.com/FREL)12.94[IYR ](https://www.etf.com/IYR)[iShares U.S. Real Estate ETF](https://www.etf.com/IYR)12.27[PSR](https://www.etf.com/PSR)[PowerShares Active US Real Estate Fund](https://www.etf.com/PSR)12.14[SCHH ](https://www.etf.com/SCHH)[Schwab U.S. REIT ETF](https://www.etf.com/SCHH)11.61[RWR ](https://www.etf.com/RWR)[SPDR Dow Jones REIT ETF](https://www.etf.com/RWR)11.47[FTY ](https://www.etf.com/FTY)[iShares Real Estate 50 ETF](https://www.etf.com/FTY)11.4[WREI ](https://www.etf.com/WREI)[Wilshire US REIT ETF](https://www.etf.com/WREI)10.93[ICF ](https://www.etf.com/ICF)[iShares Cohen & Steers REIT ETF](https://www.etf.com/ICF)10.43[XLRE](https://www.etf.com/XLRE)[Real Estate Select Sector SPDR Fund](https://www.etf.com/XLRE)9.13[EWRE ](https://www.etf.com/EWRE)[Guggenheim S&P 500 Equal Weight Real Estate ETF](https://www.etf.com/EWRE)8.38[REZ ](https://www.etf.com/REZ)[iShares Residential Real Estate Capped ETF](https://www.etf.com/REZ)7.23*Contact Sumit Roy at* [*sroy@etf.com*](file:///C:/Users/Drew/Downloads/sroy@etf.com)*.* [ + Follow ](/etf/login) [ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy) Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy) Related Topics [Real Estate](http://www.etf.com/topics/real-estate) [REIT](http://www.etf.com/topics/reit) [Equity](http://www.etf.com/topics/equity) [High Dividend Yield](http://www.etf.com/topics/high-dividend-yield) [Broad-based](http://www.etf.com/topics/broad-based)