Top REIT ETFs to Consider for Investment in 2024
Discover the top REIT ETFs for 2024 that offer diversified exposure to the real estate market. These funds provide high income, growth potential, and risk mitigation, making them ideal for portfolio diversification. Learn about the leading ETFs, their assets, yields, and performance to help guide your investment choices in real estate without the need for direct property ownership.
Leading REIT ETFs to Explore in 2024
Real Estate Investment Trusts (REITs) are key components when building diversified fixed-income or equity portfolios. They tend to lower overall portfolio risk while offering strong income streams and appreciation potential. REITs generate high dividend yields and can serve as an effective hedge against inflation, cash, bonds, and stocks. By owning and managing income-generating commercial properties, REITs can distribute substantial dividends, making them attractive investments. Investors have options to buy individual REIT stocks or invest via mutual funds and ETFs focused on real estate.
Unlike direct real estate investment, REIT ETFs spread risk across multiple companies, reducing the need for leverage and eliminating debt obligations. These funds provide exposure to the real estate market without the complexities of property management or large capital commitments.
- Vanguard Real Estate ETF (VNQ)
Focused on high income, VNQ aims for consistent revenue generation, tracking the MSCI US REIT Index. With a managing volume of over $63 billion, it offers broad exposure to U.S. REITs with a low expense ratio of 0.12%, a PE of 7.48, and a dividend yield of 4.43%, outperforming in total returns for the year. - iShares U.S. Real Estate ETF (IYR)
IYR seeks to emulate the Dow Jones US Real Estate Index, investing predominantly in REITs of various market caps. It has assets totaling around $4.78 billion, with an expense ratio of 0.44%, a PE of 6.81, and a yield of 4.06%, delivering strong performance in 2024. - iShares Cohen & Steers REIT ETF (ICF)
ICF aims to mirror the Cohen & Steers Realty Majors Index, primarily investing at least 90% in major REITs that are potential entities for mergers or acquisitions within the industry. Holding assets worth approximately $3.25 billion, it has an expense ratio of 0.35%, a PE of 12.87, and a yield of 3.85%, showcasing steady growth. - Schwab U.S. REIT ETF (SCHH)
SCHH tracks the Dow Jones US Select REIT Index, with some flexibility to include non-index assets. It manages around $3.29 billion in assets, with a low expense ratio of 0.07%, a yield of 2.64%, but experienced a slight decline in recent performance.
Overall, these ETFs enable investors to gain broad real estate exposure without the need for significant capital or dealing with property management issues. They remain valuable options for diversifying and enhancing income in investment portfolios.
