RWR vs. XLRE: Which Real Estate ETF Is the Better Buy?

1 month ago 24

Andy Gould, The Motley Fool

Wed, July 29, 2026 astatine 5:50 AM CDT 4 min read

Both of these funds supply investors with vulnerability to the spot marketplace without the hassle of buying carnal existent estate. But portion the State Street Real Estate Select Sector SPDR ETF (NYSEMKT:XLRE) limits its scope to existent property companies wrong the S&P 500, the State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) casts a wider nett crossed the broader home REIT scenery -- resulting successful a much diversified, but pricier, portfolio.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from monthly returns implicit the disposable money past (up to 5 years). The 1-year instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

Investors wage a premium for RWR's broader reach: its 0.25% disbursal ratio is astir 3 times XLRE's 0.08% fee. RWR has besides delivered the stronger instrumentality implicit the past 12 months and pays a somewhat higher dividend output than XLRE.

Performance & hazard examination

What's wrong

Launched successful 2001, RWR spreads its portfolio crossed 97 positions. Its apical holdings are Welltower (NYSE:WELL) astatine 10.5%, Prologis (NYSE:PLD) astatine 9.1%, and Simon Property Group (NYSE:SPG) astatine 4.6%.

XLRE is acold much concentrated, with conscionable 31 holdings. Its largest positions are Welltower (NYSE:WELL) astatine 11.0%, Prologis (NYSE:PLD) astatine 8.7%, and Equinix (NASDAQ:EQIX) astatine 7.1%. XLRE was launched successful 2015.

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What this means for investors

The biggest quality betwixt these 2 funds involves a acquainted trade-off: breadth versus cost.

RWR's 97-holding portfolio gives investors vulnerability to a wider portion of the REIT beingness -- including smaller and mid-cap names that aren't portion of the S&P 500 -- which helps explicate its stronger caller performance. XLRE, by contrast, sticks to S&P 500 existent property companies, resulting successful a leaner, much concentrated money that costs a 3rd arsenic overmuch to hold.

Expense ratios mightiness look tiny successful isolation, but they compound implicit clip -- which tin marque a important quality successful returns implicit a multi-decade holding period.

It's besides worthy noting that some funds thin heavy connected the aforesaid apical holdings, Welltower and Prologis, adjacent though their show implicit the past twelvemonth doesn't look that similar. RWR's higher fees and wider nett haven't wounded its returns; its 25% one-year summation suggests diversification into non-S&P 500 REITs has helped it importantly outperform XLRE implicit the aforesaid stretch.

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