Real Estate Investment Trust (REIT) ETFs offer investors an efficient way to gain exposure to the real estate market. These funds pool investor money to invest in various real estate assets, providing diversification, liquidity, and often attractive dividend yields. Here are five of the best REIT ETFs that investors should consider for their portfolios.

Vanguard Real Estate ETF (VNQ)

The Vanguard Real Estate ETF (VNQ) is one of the largest and most popular REIT ETFs available. It seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Index, offering exposure to a broad range of real estate sectors. With a low expense ratio, VNQ is an attractive option for cost-conscious investors looking for diversified exposure to U.S. real estate.

Schwab U.S. REIT ETF (SCHH)

The Schwab U.S. REIT ETF (SCHH) provides investors with a low-cost way to invest in a diversified portfolio of U.S. real estate investment trusts. Tracking the Dow Jones U.S. Select REIT Index, SCHH focuses on equity REITs, which own and operate income-generating real estate. This ETF is known for its competitive expense ratio and effective diversification across the real estate sector.

iShares U.S. Real Estate ETF (IYR)

The iShares U.S. Real Estate ETF (IYR) offers broad exposure to U.S. real estate companies, including REITs. It tracks the Dow Jones U.S. Real Estate Index, providing access to a wide range of real estate sectors such as residential, retail, and industrial properties. IYR is popular among investors for its liquidity and comprehensive coverage of the real estate market.

SPDR Dow Jones REIT ETF (RWR)

The SPDR Dow Jones REIT ETF (RWR) seeks to replicate the performance of the Dow Jones U.S. Select REIT Index. This ETF focuses on equity REITs, offering exposure to various property types like office buildings, malls, and apartment complexes. With its strong track record and moderate expense ratio, RWR is a solid choice for investors seeking diversified real estate exposure.

Invesco KBW Premium Yield Equity REIT ETF (KBWY)

The Invesco KBW Premium Yield Equity REIT ETF (KBWY) differentiates itself by focusing on high-yielding REITs. This ETF tracks the KBW Nasdaq Premium Yield Equity REIT Index, which targets small- and mid-cap REITs that offer attractive dividend yields. KBWY is ideal for income-focused investors looking to enhance their portfolio’s yield through real estate investments.

Incorporating REIT ETFs into an investment portfolio can be a strategic way to gain exposure to the real estate market without directly owning properties. Each of these top REIT ETFs offers unique benefits, from low costs to high yields, making them worth considering for investors looking to diversify and bolster their portfolios with real estate assets.