What is the biggest real estate ETF?

As of June 2026, the largest U.S. listed real estate ETF was the Vanguard Real Estate ETF, with more than $37 billion in assets.

How do real estate ETFs differ from REITs?

REITs own and manage portfolios of income-producing properties and must distribute at least 90% of their taxable income to shareholders. Real estate ETFs, on the other hand, are a type of investment fund that can hold REITs along with other real estate-related companies, offering broader exposure.

Can real estate ETFs be used for long-term investing?

Absolutely. Real estate ETFs are well suited for long-term holds, especially if you focus on low-fee options and reinvest the dividends over time to maximize compounding.

How are dividends from real estate ETFs taxed?

Distributions from real estate ETFs are typically a mix of ordinary income, capital gains, and return of capital. Each component is taxed differently, just as the underlying REITs they hold are.

Is it good to invest in real estate ETFs?

Real estate ETFs can be a smart addition for investors who want steady income and diversification without the hassle of managing physical property. They offer exposure to professionally managed portfolios of income-generating real estate, often with regular distributions. However, like any investment, they can fluctuate in value, so they're best suited for long-term investors comfortable with moderate volatility.

Can real estate ETFs protect against inflation?

To an extent, yes. Real estate often acts as a partial hedge against inflation because property values and rental income tend to rise as prices increase. Many REITs in these ETFs can raise rents or adjust leases, helping their income keep pace with inflation. That said, if inflation drives interest rates sharply higher, real estate ETFs may face short-term pressure from higher borrowing costs.

What fees are associated with real estate ETFs?

Real estate ETFs charge an expense ratio that covers portfolio management, administration, and operating costs. It is expressed as a annualized percentage of your investment, deducted over time on the back end.

4 Best Real Estate ETFs for 2026 and How to Invest

By Tony Dong – Updated Jun 4, 2026 at 2:44 PM EST | Fact-checked by Margo Winton Parodi

Key Points

Real estate ETFs offer diversified exposure to real estate without the costs of physical ownership.
Top real estate ETFs provide low expense ratios and strong income potential from dividends.
Investing in real estate ETFs is ideal for long-term strategies to potentially outpace inflation.

The best real estate ETFs (exchange-traded funds) let you invest in professionally managed portfolios of real estate operating companies and real estate investment trusts (REITs) without actually owning physical property.

Unlike rental properties, real estate ETFs offer instant diversification, no tenants to manage, no maintenance or repair costs, no mortgages, and no property taxes.

You can own real estate ETFs in a brokerage account just like you would with any stock, and you can benefit from above-average dividend yields. There is also potential for capital appreciation, though the cyclical nature of the real estate sector can create downside volatility.

Four top real estate ETFs for 2026

Here are some of the best real estate ETFs investors can consider this year, screened for sufficient assets under management (AUM), low expense ratios, and broad diversification.

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Ticker Information Table
Name and ticker	Current price
Vanguard Real Estate ETF (NYSEMKT:VNQ)	$98.51
Schwab Strategic Trust - Schwab U.s. REIT ETF (NYSEMKT:SCHH)	$24.17
iShares Trust - iShares Core U.s. REIT ETF (NYSEMKT:USRT)	$66.86
Select Sector SPDR Trust - State Street Real Estate Select Sector SPDR ETF (NYSEMKT:XLRE)	$45.36

Data as of Jun 15, 2026. Showing 4 of 4 total entries.

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1. Vanguard Real Estate ETF

NYSEMKT: VNQ

Vanguard Real Estate ETF

Today's Change

(0.92%) $0.90

Current Price

$98.51

Key Data Points

Day's Range

$97.86 - $98.86

52wk Range

$86.84 - $98.86

Volume

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Vanguard Real Estate ETF (VNQ +0.92%) is the largest on the market, with more than $37 billion in assets under management. The fund also has a mutual fund share class, and charges a 0.13% expense ratio.

This ETF tracks the MSCI US Investable Market Real Estate 25/50 Index and holds a broad portfolio of 145 companies. Despite that diversification, the portfolio still tilts toward large-cap real estate firms, with a median market capitalization of about $38.7 billion.

Income potential is one of the main attractions. The ETF has an unadjusted effective yield of 3.38% as of May 2026, which reflects the full amount of REIT distributions, including dividend income, return of capital, and capital gains.

When adjusting for those non-income components, the effective yield is closer to 2.69%. Unlike many bond ETFs, Vanguard does not quote a 30-day SEC yield for this fund, though the yield is calculated monthly, as with other stock funds.

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2. Schwab U.S. REIT ETF

NYSEMKT: SCHH

Schwab Strategic Trust - Schwab U.s. REIT ETF

Today's Change

(1.00%) $0.24

Current Price

$24.17

Key Data Points

Day's Range

$24.01 - $24.23

52wk Range

$20.63 - $24.23

Volume

5.1M

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Schwab U.S. REIT ETF (SCHH +1.00%) stands out for cost. Vanguard is often known for offering some of the cheapest ETFs on the market, but when it comes to real estate funds, Schwab actually has a lower expense ratio at 0.07%.

This ETF tracks the Dow Jones Equity All REIT Capped Index. While the portfolio primarily consists of real estate investment trusts, it also includes a small number of related real estate operating companies and service providers.

Importantly, it excludes mortgage REITs, which behave more like specialty finance companies that earn income by borrowing to invest in mortgage-backed securities rather than owning physical properties.

The portfolio still offers strong income potential. This Schwab REIT ETF pays a 30-day SEC yield of about 3.39% as of June 2, 2026.

Investors should keep taxes in mind, though. Most REIT distributions are taxed as ordinary income rather than qualified dividends, which can reduce after-tax returns when held in a taxable account.

3. iShares Core U.S. REIT ETF

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NYSEMKT: USRT

iShares Trust - iShares Core U.s. REIT ETF

Today's Change

(0.94%) $0.62

Current Price

$66.86

Key Data Points

Day's Range

$66.37 - $67.00

52wk Range

$55.34 - $67.00

Volume

341.5K

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iShares Core U.S. REIT ETF (USRT +0.94%) is another low-cost option for investors seeking broad exposure to the U.S. real estate sector. It is competitive with Schwab’s offering on fees, charging a slightly higher 0.08% expense ratio. The fund is also well-established, with about $4.1 billion in assets under management.

This ETF tracks the FTSE Nareit Equity REITs Index and holds a diversified portfolio of 126 companies. Similar to Schwab’s real estate ETF, it excludes mortgage REITs and focuses instead on equity REITs that own and operate physical properties.

The portfolio is broadly distributed across the sector, though it is largely dominated by healthcare, retail, industrial, and data center REITs, followed by multifamily residential properties. Income potential is also attractive, with the ETF offering a 30-day SEC yield of 2.98%.

4. State Street Real Estate Select Sector SPDR ETF

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NYSEMKT: XLRE

Select Sector SPDR Trust - State Street Real Estate Select Sector SPDR ETF

Today's Change

(0.98%) $0.44

Current Price

$45.36

Key Data Points

Day's Range

$45.02 - $45.52

52wk Range

$39.73 - $45.52

Volume

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Pros and cons of investing in real estate ETFs

Before investing, it's important to weigh the benefits and drawbacks of real estate ETFs, especially if you're deciding between owning a fund and a physical property.

Pros

Highly liquid: They trade on public exchanges during market hours, just like stocks, with real-time pricing through bid and ask spreads.
Diversified exposure: A single ETF often holds REITs from multiple real estate sectors, and each REIT owns a portfolio of properties. So, you're instantly diversified across asset types and regions.
No mortgage required: You don't need to take out a loan to gain exposure; if you want leverage, you can use margin through your brokerage.
No tenant hassles: There's no screening, managing, or dealing with tenants. Income comes from REIT dividends, not monthly rent checks.
No property taxes or maintenance: You're not directly responsible for the recurring costs associated with physical ownership.

Cons

Market risk: Because they trade like stocks, real estate ETFs are exposed to stock market volatility, even when real estate prices are stable or rising.
Dilution risk: Some REITs may issue new shares to raise capital, diluting existing shareholders' value.
Tax inefficiency: You can't deduct costs such as mortgage interest, property taxes, or depreciation like you could with a rental property, making them less flexible from a tax-planning perspective.

Should you invest in real estate ETFs?

Start by asking whether real estate exposure actually fits your goals. Most investors turn to real estate for two reasons: to potentially outpace inflation over the long term and to generate steady income from rents and property cash flows. Real estate ETFs package those characteristics into a liquid investment that trades like a stock.

Before adding a real estate ETF, check how much real estate exposure you already have. If you own a home and are paying down a mortgage, you may already have a meaningful portion of your net worth tied to property values. In that case, adding more real estate through ETFs may not meaningfully improve diversification.

If you decide you do want additional exposure, consider where you hold it. Real estate investment trusts, which make up most real estate ETFs, tend to pay higher yields that are often taxed as ordinary income. Because of that, these ETFs are frequently better suited for tax-advantaged accounts such as Roth IRAs, where those distributions can compound without creating annual tax drag.

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FAQ

How to invest in real estate ETFs: FAQ

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Tony Dong has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.

4 Best Real Estate ETFs for 2026 and How to Invest

Key Points

Four top real estate ETFs for 2026

1. Vanguard Real Estate ETF

Key Data Points

2. Schwab U.S. REIT ETF

Key Data Points

3. iShares Core U.S. REIT ETF

Key Data Points

4. State Street Real Estate Select Sector SPDR ETF

Key Data Points

Pros and cons of investing in real estate ETFs

Pros

Cons

Should you invest in real estate ETFs?

Related investing topics

REITs vs. Stocks: Everything You Need to Know

The 3 Safest REITs to Buy Right Now

The Largest Real Estate Companies by Market Cap in June 2026

How to Start a Real Estate Investment Trust (REIT)

FAQ

How to invest in real estate ETFs: FAQ

What is the biggest real estate ETF?

What is the biggest real estate ETF?

How do real estate ETFs differ from REITs?

How do real estate ETFs differ from REITs?

Can real estate ETFs be used for long-term investing?

Can real estate ETFs be used for long-term investing?

How are dividends from real estate ETFs taxed?

How are dividends from real estate ETFs taxed?

Is it good to invest in real estate ETFs?

Is it good to invest in real estate ETFs?

Can real estate ETFs protect against inflation?

Can real estate ETFs protect against inflation?

What fees are associated with real estate ETFs?

What fees are associated with real estate ETFs?

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Key Data Points

Pros and cons of investing in real estate ETFs

Pros

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Should you invest in real estate ETFs?

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The 3 Safest REITs to Buy Right Now

The Largest Real Estate Companies by Market Cap in June 2026

How to Start a Real Estate Investment Trust (REIT)

How to invest in real estate ETFs: FAQ

What is the biggest real estate ETF?

What is the biggest real estate ETF?

How do real estate ETFs differ from REITs?

How do real estate ETFs differ from REITs?

Can real estate ETFs be used for long-term investing?

Can real estate ETFs be used for long-term investing?

How are dividends from real estate ETFs taxed?

How are dividends from real estate ETFs taxed?

Is it good to invest in real estate ETFs?

Is it good to invest in real estate ETFs?

Can real estate ETFs protect against inflation?

Can real estate ETFs protect against inflation?

What fees are associated with real estate ETFs?

What fees are associated with real estate ETFs?

Key Data Points

3. iShares Core U.S. REIT ETF

Key Data Points

Key Data Points

How to invest in real estate ETFs

4. State Street Real Estate Select Sector SPDR ETF