Best Real Estate ETFs for 2026
Real estate ETFs provide exposure to real estate investment trusts (REITs) and real estate operating companies that own, manage, and develop properties ranging from office buildings and apartments to data centers and cell towers. REITs are required to distribute at least 90% of their taxable income as dividends, making real estate ETFs popular among income-seeking investors looking for yields that often exceed those of bond funds and the broader stock market.
VNQ from Vanguard is the largest real estate ETF, tracking the MSCI US Investable Market Real Estate 25/50 Index with exposure to the full spectrum of US REIT sectors. SCHH from Schwab offers similar broad REIT exposure at one of the lowest expense ratios in the category, making it a strong choice for cost-conscious investors. IYR from iShares tracks the Dow Jones US Real Estate Index and provides another well-established option with strong liquidity and options market depth.
Real estate ETFs are particularly sensitive to interest rate changes because higher rates increase borrowing costs for property companies and make their dividend yields less attractive relative to bonds. The sector experienced significant pressure during the 2022-2023 rate hiking cycle, but as rates stabilize or decline, real estate ETFs stand to benefit from both lower financing costs and improved relative yield attractiveness. Modern REITs have diversified well beyond traditional property types, with data centers, cell towers, and industrial logistics facilities representing significant growth areas.
How We Rank
ETFs are ranked by assets under management (AUM). Only ETFs with $50M+ in assets are included. Data is updated daily.
| # | Symbol | Fund Name | AUM |
|---|---|---|---|
| 1 | VNQ | Vanguard Real Estate ETF | $64.60B |
| 2 | XLF | State Street Financial Select Sector SPDR ETF | $51.04B |
| 3 | SCHH | Schwab U.S. REIT ETF | $9.95B |
| 4 | XLRE | State Street Real Estate Select Sector SPDR ETF | $7.88B |
| 5 | REET | iShares Global REIT ETF | $4.80B |
| 6 | IYR | iShares U.S. Real Estate ETF | $4.25B |
| 7 | QLTY | GMO U.S. Quality ETF | $4.00B |
| 8 | USRT | iShares Core U.S. REIT ETF | $3.80B |
| 9 | VNQI | Vanguard Global ex-U.S. Real Estate ETF | $3.70B |
| 10 | DFGR | Dimensional - Global Real Estate ETF | $3.53B |
| 11 | AAAU | Goldman Sachs Physical Gold ETF | $2.85B |
| 12 | ICF | iShares Select U.S. REIT ETF | $2.10B |
| 13 | JPEF | JPMorgan Equity Focus ETF | $1.92B |
| 14 | DTCR | Global X - Data Center & Digital Infrastructure ETF | $1.81B |
| 15 | RWR | State Street SPDR Dow Jones REIT ETF | $1.78B |
| 16 | DFAR | Dimensional - US Real Estate ETF | $1.69B |
| 17 | FREL | Fidelity MSCI Real Estate Index ETF | $1.44B |
| 18 | RWO | State Street SPDR Dow Jones Global Real Estate ETF | $1.24B |
| 19 | FTGS | First Trust Growth Strength ETF | $1.22B |
| 20 | RLY | State Street Multi-Asset Real Return ETF | $1.18B |
| 21 | SMIG | Bahl & Gaynor Small/Mid Cap Income Growth ETF | $1.13B |
| 22 | BBRE | JPMorgan BetaBuilders MSCI US REIT ETF | $1.12B |
| 23 | HAUZ | Xtrackers International Real Estate ETF | $1.08B |
| 24 | VGWEF | Vanguard FTSE All-World High Dividend Yield UCITS ETF | $1.04B |
| 25 | BKGI | BNY Mellon Global Infrastructure Income ETF | $972.9M |
What to Look For
Check the dividend yield, which is a primary reason investors buy real estate ETFs. Yields typically range from 3% to 5% depending on the sub-sector mix and market conditions. The expense ratio for major REIT ETFs is very low, around 0.07% to 0.40%, so this is not a major differentiator among the top funds.
Examine the property-type breakdown — some REIT ETFs are heavily tilted toward specialized REITs like data centers and cell towers, while others have more traditional exposure to retail, office, and residential properties. Also consider interest rate sensitivity, as longer-duration REITs are more affected by rate changes.
Which Real Estate ETFs Is Best for You?
VNQ is the gold standard of real estate ETFs with the largest AUM and broadest REIT coverage. Its roughly 160 holdings span every property type from residential apartments and industrial warehouses to data centers and healthcare facilities. VNQ's low expense ratio and comprehensive coverage make it the ideal core REIT holding for most portfolios.
SCHH is the best low-cost alternative to VNQ, offering a very competitive expense ratio of about 0.07%. Its index focuses on large US REITs and provides solid diversification across property types. SCHH is particularly attractive for Schwab brokerage customers and cost-focused investors who want straightforward REIT exposure.
IYR provides strong liquidity and an active options market, making it useful for tactical REIT allocation and hedging strategies. Its broader index includes some real estate services companies alongside pure REITs, giving it a slightly different exposure profile than VNQ or SCHH. IYR is often the choice for traders and institutional investors in the REIT space.
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