In recent years, real estate investment trusts (REITs) have become increasingly popular among investors seeking exposure to the real estate sector without the hassle of owning and managing physical properties. Additionally, exchange traded funds (ETFs) have made it easier than ever to invest in a diversified portfolio of these REITs. This article will examine four real estate ETFs that investors and advisors can consider for their portfolios in 2023. Whether investors are seeking exposure to a specific sector or a diversified portfolio, there is a real estate ETF available to meet their needs.
Top-Performing Real Estate ETFs
The Pacer Industrial Real Estate ETF (INDS ) is a great option for investors looking for exposure to the industrial real estate sector. It has an AUM of $212.64 million and a YTD return of 8.21%. INDS has been a top performer in 2023. The ETF’s top holdings include Prologis, Inc. (15.42%) and Public Storage (14.79%), two of the largest players in the industrial and self-storage sectors, respectively. With an expense ratio of 0.55%, INDS is a relatively low-cost option for investors.
See more: Play REIT Rebound With Active, Passive Real Estate ETFs
For investors looking for a more conservative approach to real estate investing, the Nuveen Short-Term REIT ETF (NURE ) is a great option. It has an AUM of $56.24 million and a YTD return of 7.01%. NURE invests in a diversified portfolio of short-term REITs, with a focus on residential and commercial properties. The ETF’s top holdings include American Homes 4 Rent Class A (5.74%) and Invitation Homes, Inc. (5.58%). With an expense ratio of 0.35%, NURE is a low-cost option for investors looking for exposure to the real estate sector.
Diversified Portfolio ETFs
The iShares Residential and Multisector Real Estate ETF (REZ ) is a great option for investors looking for exposure to a diversified portfolio of residential and commercial properties. It has an AUM of $637.84 million and a YTD return of 4.78%. REZ invests in a range of REITs, including those focused on residential real estate, healthcare, and self-storage sectors. The ETF’s top holdings include Public Storage (12.00%) and Welltower Inc. (9.75%). With an expense ratio of 0.48%, REZ is a relatively low-cost option for investors.
See more: Real Estate ETFs: A Good Investment Amidst Predicted Recession?
The JPMorgan BetaBuilders MSCI US REIT ETF (BBRE ) is a great option for investors looking for exposure to a broad range of REITs. It has an AUM of $737.1 million and a YTD return of 2.23%. BBRE invests in a diversified portfolio of REITs, with a focus on commercial properties. The ETF’s top holdings include Prologis, Inc. (11.90%) and Equinix, Inc. (7.24%). It has an expense ratio of 0.11%. BBRE is one of the lowest-cost options for investors looking to invest in the real estate sector.
Investors who seek exposure to the real estate sector without the hassle of owning and managing physical properties can benefit greatly from real estate ETFs. The four ETFs listed above offer a variety of options for investors, ranging from seeking exposure to specific sectors (INDS) to obtaining a diversified portfolio (REZ, BBRE). These ETFs are worth considering for investors and advisors alike, given their low expense ratios and returns in 2023.
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