5 Top Performing US Focused Real Estate ETFs

August 26, 2016

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), 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), 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), 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:

 

Ticker Fund YTD Return (%)
KBWY  PowerShares KBW Premium Yield Equity REIT Portfolio 28.96
ROOF IQ US Real Estate Small Cap ETF 19.07
VNQ  Vanguard REIT Index Fund 13.94
FRI First Trust S&P REIT Index Fund 13.6
FREL  Fidelity MSCI Real Estate Index ETF 12.94
IYR  iShares U.S. Real Estate ETF 12.27
PSR PowerShares Active US Real Estate Fund 12.14
SCHH  Schwab U.S. REIT ETF 11.61
RWR  SPDR Dow Jones REIT ETF 11.47
FTY  iShares Real Estate 50 ETF 11.4
WREI  Wilshire US REIT ETF 10.93
ICF  iShares Cohen & Steers REIT ETF 10.43
XLRE Real Estate Select Sector SPDR Fund 9.13
EWRE  Guggenheim S&P 500 Equal Weight Real Estate ETF 8.38
REZ  iShares Residential Real Estate Capped ETF 7.23

 

Contact Sumit Roy at [email protected].

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