Top REIT ETFs for Smart Real Estate Investment in 2017
Discover the top REIT ETFs for 2017 that offer investors a low-cost, diversified route into real estate investments. These funds focus on high dividend yields, broad market exposure, and industry-leading portfolios, providing an excellent opportunity to grow wealth without direct property management. Ideal for those seeking income and capital appreciation, these ETFs serve as practical tools for building a balanced investment portfolio in the real estate sector.
Real Estate Investment Trusts (REITs) are key components for diversifying both fixed-income and equity portfolios. They offer attractive dividend yields, potential for capital growth, and lower overall risk. REITs typically own or finance income-generating commercial properties, providing investors with options to participate directly in real estate markets through stocks, mutual funds, or ETFs, without managing properties personally.
Unlike traditional real estate investments that involve leverage, REIT ETFs spread investments across multiple firms, reducing risk and eliminating the need for borrowing. These funds allow investors to benefit from high dividends and exposure to a broad real estate market, making them a practical choice for diversification.
This guide highlights the top REIT ETFs for 2017 based on assets under management as of July 2017. These include:
Vanguard Real Estate ETF (VNQ)
Focused on generating high income, VNQ tracks an index representing US REITs, mainly concentrated on cash flow rather than growth. With $63.32 billion in assets, it offers a low expense ratio of 0.12%, a PE of 7.48, and a dividend yield of 4.43%. Its diversified holdings make it a top choice for income-focused investors.
iShares U.S. Real Estate ETF (IYR)
Aligned with the Dow Jones US Real Estate Index, IYR invests predominantly in REITs with holdings across small, mid, and large caps. It manages $4.78 billion in assets with an expense ratio of 0.44%, a PE of 6.81%, and a yield of 4.06%. Its broad exposure appeals to investors seeking market-mirroring performance.
iShares Cohen & Steers REIT ETF (ICF)
This ETF tracks the Cohen & Steers Realty Majors Index by investing at least 90% of assets in major REITs, including companies involved in industry consolidations. With $3.25 billion in assets, it has an expense ratio of 0.35%, PE of 12.87, and a yield of 3.85%, suitable for investors looking for industry leaders.
Schwab U.S. REIT ETF (SCHH)
SCHH invests in REITs included in or related to the Dow Jones US Select REIT Index, with some flexibility for non-index assets. It holds $3.29 billion, with an expense ratio of 0.07%, a yield of 2.64%, and a slight negative return of -1.19%, providing affordable diversification for all investor levels.
Investing in these ETFs allows investors to access the real estate market without the hassles of property management, financing, or maintenance. They provide a convenient, low-entry barrier way to diversify portfolios with real estate exposure.
