Broader REIT Market or Lower-Cost S&P 500 Real Estate? RWR vs. XLRE
Written by Eric Trie for The Motley Fool -> State Street SPDR Dow Jones REIT ETF offers a higher trailing-12-month dividend yield and a more diversified portfolio than State Street Real Estate Select Sector SPDR ETF State Street Real Estate Select Sector SPDR ETF maintains a lo
State Street SPDR Dow Jones REIT ETF offers a higher trailing-12-month dividend yield and a more diversified portfolio than State Street Real Estate Select Sector SPDR ETF
State Street Real Estate Select Sector SPDR ETF maintains a lower expense ratio of 0.08% compared to 0.25% for the fund tracking the Dow Jones index
While both funds share identical five-year beta profiles of 0.98, State Street SPDR Dow Jones REIT ETF has delivered higher total returns over the past year
The State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) offers broader diversification and a higher yield, while the State Street Real Estate Select Sector SPDR ETF (NYSEMKT:XLRE) provides ultra-low-cost exposure to S&P 500 real estate giants.
Both funds target the U.S. real estate market but through different lenses. State Street Real Estate Select Sector SPDR ETF focuses on the narrow slice of real estate companies within the S&P 500, excluding mortgage REITs. State Street SPDR Dow Jones REIT ETF tracks a broader index of publicly traded REITs, providing more granular exposure across the industry at a slightly higher cost. This comparison looks at how these two offerings differ in depth and historical performance.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The State Street Real Estate Select Sector SPDR ETF is the more affordable option for investors with an expense ratio of 0.08%. However, those seeking a higher payout may prefer the State Street SPDR Dow Jones REIT ETF, which currently offers a slightly higher yield.
State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) provides exposure to 99 holdings, primarily concentrated in real estate at 99%. Its largest positions include Prologis Inc (NYSE:PLD) at 10.03%, Welltower Inc (NYSE:WELL) at 9.13%, and Equinix Inc (NASDAQ:EQIX) at 4.76%. Launched in 2001, the fund has a trailing-12-month dividend of $3.73 per share. This broader basket captures mid-sized players that are often omitted from large-cap focused funds, potentially offering a more comprehensive view of the domestic REIT landscape by including a wider array of property types and market capitalizations.
