XLRE vs. VNQ: a Targeted Sector Approach or Broad Real Estate Exposure

1 day ago 4

Eric Trie, The Motley Fool

Tue, January 6, 2026 astatine 10:22 AM CST 5 min read

VNQ holds implicit 5 times much assets nether absorption than XLRE and owns a overmuch broader premix of existent property stocks
Both ETFs delivered identical 1-year returns and saw akin maturation of $1,000 implicit 5 years
VNQ yields 0.5 percent points much than XLRE and has an disbursal ratio of 0.13%, compared to XLRE's 0.08%.
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The State Street Real Estate Select Sector SPDR ETF (XLRE) and the Vanguard Real Estate ETF (VNQ) disagree astir successful breadth and assets nether management, with VNQ offering much holdings, a larger AUM, and a marginally higher yield, portion XLRE remains the lower-cost prime for assemblage exposure.

Both XLRE and VNQ supply vulnerability to United States existent property equities, but their approaches diverge: XLRE focuses narrowly connected S&P 500 existent property names, portion VNQ casts a wider nett crossed large, mid, and small-cap REITs. This examination highlights cardinal differences successful cost, yield, diversification, and hazard to assistance investors determine which benignant whitethorn amended suit their portfolio needs.

Metric

XLRE

VNQ

Issuer	SPDR	Vanguard
Expense ratio	0.08%	0.13%
1-yr instrumentality (as of 2025-12-26)	-0.9%	-0.9%
Dividend yield	3.4%	3.9%
AUM	$7.5 billion	$65.4 billion

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

XLRE looks much affordable for cost-conscious investors, with an disbursal ratio of 0.08% compared to VNQ’s 0.13%. VNQ, however, offers a somewhat higher yield, paying retired 3.9% versus XLRE’s 3.4%.

Metric

XLRE

VNQ

Growth of $1,000 implicit 5 years	$1,119	$1,053

VNQ tracks a wide existent property scale and, astatine implicit 21 years old, present manages $65.4 cardinal crossed 158 holdings. Its portfolio is dominated by existent property companies (98%), but a tiny portion is allocated to connection services and cash. Top positions see Welltower Inc (NYSE:WELL), Prologis Inc (NYSE:PLD), and American Tower Corp (NYSE:AMT), with the largest holding making up conscionable implicit 9% of assets.

XLRE, successful contrast, focuses exclusively connected existent property stocks successful the S&P 500, resulting successful a much concentrated portfolio of 31 holdings. Its apical 3 positions—Welltower Inc (NYSE:WELL), Prologis Inc (NYSE:PLD), and American Tower Corp (NYSE:AMT)—command somewhat larger weights than successful VNQ, starring to a portfolio that whitethorn determination much successful sync with the largest existent property names. Neither money carries structural quirks oregon leverages, and some exclude owe REITs.