5 Best Real Estate ETFs To Buy Now

In this article, we discuss 5 best real estate ETFs to buy. If you want to read our discussion on the real estate market, head directly to 10 Best Real Estate ETFs To Buy Now. 

5. iShares Core U.S. REIT ETF (NYSE:USRT)

5-Year Share Price Performance as of March 29: 2.89%

iShares Core U.S. REIT ETF (NYSE:USRT) aims to mirror the performance of the FTSE Nareit Equity REITs Index. This fund caters to investors seeking both income and growth, offering broad exposure to different sectors of the US real estate market. As of March 28, 2024, the fund’s net assets amounted to $2.3 billion and its net expense ratio came in at 0.08%. The ETF’s portfolio consists of 131 stocks. 

Public Storage (NYSE:PSA) is one of the top holdings of iShares Core U.S. REIT ETF (NYSE:USRT). The company specializes in acquiring, developing, owning, and operating self-storage facilities. Public Storage (NYSE:PSA) paid a $3.00 per share quarterly dividend to shareholders on March 28. 

According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Public Storage (NYSE:PSA), compared to 24 funds in the last quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 725,865 shares worth $221.4 million. 

Baron Real Estate Fund stated the following regarding Public Storage (NYSE:PSA) in its fourth quarter 2023 investor letter:

“In the most recently reported quarter, business results for Public Storage (NYSE:PSA), a REIT that is the world’s largest owner, operator, and developer of self-storage facilities, were mildly disappointing as occupancy trends and rents moderated as a result of less housing-related movement and a more price-sensitive consumer. We decided to sell our position because we believe near-term rent and overall cash-flow growth may remain subdued. We are likely to revisit Public Storage in the future.”

4. JPMorgan BetaBuilders MSCI U.S. REIT ETF (BATS:BBRE)

5-Year Share Price Performance as of March 29: 4.78%

JPMorgan BetaBuilders MSCI U.S. REIT ETF (BATS:BBRE) offers exposure to the US equity REIT market through an indexed approach. Its underlying index tracks the performance of US equity REIT securities, focusing mainly on small and mid-cap companies. The fund employs a passive investment strategy. JPMorgan BetaBuilders MSCI U.S. REIT ETF (BATS:BBRE) was launched on June 15, 2018. As of March 28, 2024, the ETF has net assets of $818.08 million, with a portfolio of 119 stocks and an expense ratio of 0.11%. 

Digital Realty Trust, Inc. (NYSE:DLR) is one of the largest holdings of JPMorgan BetaBuilders MSCI U.S. REIT ETF (BATS:BBRE). Digital Realty Trust, Inc. (NYSE:DLR) specializes in uniting companies and data through a comprehensive range of data center, colocation, and interconnection solutions. On February 29, Citi initiated a Positive Catalyst Watch for Digital Realty Trust, Inc. (NYSE:DLR) due to expected favorable demand for hyperscale leasing, which is anticipated to strengthen bookings and core metrics. The price target was raised to $160 from $154, while Citi maintained a Buy rating for DLR.

According to Insider Monkey’s fourth quarter database, 35 hedge funds were bullish on Digital Realty Trust, Inc. (NYSE:DLR), compared to 27 funds in the last quarter. 

Baron Real Estate Fund stated the following regarding Digital Realty Trust, Inc. (NYSE:DLR) in its fourth quarter 2023 investor letter:

“Following strong share performance, we trimmed our large investment in data center REIT Digital Realty Trust, Inc. (NYSE:DLR). We remain optimistic about the long-term potential for the company.

Data center landlords such as Digital Realty (and Equinix, Inc.) are benefiting from record low vacancy, demand outpacing supply, more constrained power availability, and rising rental rates. Several secular demand vectors, which are currently broadening, are contributing to robust fundamentals for data center space globally. They include the outsourcing of information technology infrastructure, increased cloud computing adoption, the ongoing growth in mobile data and internet traffic, and artificial intelligence as a new wave of data center demand.

In the last few months, we have also spent time with CEO Andy Power of Digital Realty. Over the last few years, Andy and Digital Realty’s management team have been undergoing a business transformation, which accelerated after its acquisition of Interxion in March 2020, a pure-play European network-dense data center operator. The company has been shedding non-core slower-growth assets, investing and expanding in Europe, growing its retail colocation business, improving its balance sheet, and adding operational expertise by supplementing new management leadership. We have spent a significant amount of time with Andy over the years and believe the investments the company has made are on the cusp of bearing fruit and will pay dividends for years to come. In addition, we believe the fundamentals in its core business are at an inflection point with robust demand/bookings, pricing power, hyperscale cloud players outsourcing a higher percentage of their digital infrastructure needs and limited competitive capacity. We believe these factors will lead to growth in the core business in the next few years and are optimistic about the long-term prospects for the company.”

3. The Real Estate Select Sector SPDR Fund (NYSE:XLRE)

5-Year Share Price Performance as of March 29: 8.15%

The Real Estate Select Sector SPDR Fund (NYSE:XLRE) aims to match the price and yield performance of the Real Estate Select Sector Index. This index offers an accurate representation of the real estate sector within the S&P 500 Index, providing targeted exposure to companies engaged in real estate management, development, and REITs, while excluding mortgage REITs. The Real Estate Select Sector SPDR Fund (NYSE:XLRE) is one of the best real estate ETFs. The fund was established on October 7, 2015. As of April 1, 2024, the ETF has an expense ratio of 0.09% and its portfolio comprises 31 stocks. 

Crown Castle Inc. (NYSE:CCI) is one of the largest holdings of The Real Estate Select Sector SPDR Fund (NYSE:XLRE). Crown Castle Inc. (NYSE:CCI) owns, operates, and leases cell towers and several route miles of fiber supporting small cells and fiber solutions across major US markets. On January 24, the company reported a Q4 FFO of $1.82 and a revenue of $1.67 billion, outperforming Wall Street estimates by $0.08 and $10 million, respectively. 

According to Insider Monkey’s fourth quarter database, 45 hedge funds were bullish on Crown Castle Inc. (NYSE:CCI), same as the prior quarter. 

Carillon Eagle Growth & Income Fund made the following comment about Crown Castle Inc. (NYSE:CCI) in its Q2 2023 investor letter:

“Crown Castle Inc. (NYSE:CCI) detracted from performance as telecom companies have temporarily slowed their deployment of additional cellular spectrum. This slowdown could impair future growth for cell tower companies.”

2. Invesco S&P 500 Equal Weight Real Estate ETF (NYSE:RSPR)

5-Year Share Price Performance as of March 29: 8.47%

Invesco S&P 500 Equal Weight Real Estate ETF (NYSE:RSPR) is designed to track the performance of the S&P 500 Equal Weight Real Estate Index. This ETF invests at least 90% of its assets in securities included in the index, which equally weights stocks in the real estate sector of the S&P 500 Index. It is one of the best real estate ETFs to buy. As of March 28, 2024, Invesco S&P 500 Equal Weight Real Estate ETF (NYSE:RSPR)’s expense ratio came in at 0.40% and its portfolio consists of 32 stocks. The ETF was launched on August 13, 2015. 

CoStar Group, Inc. (NASDAQ:CSGP) is the largest holding of the Invesco S&P 500 Equal Weight Real Estate ETF (NYSE:RSPR). CoStar Group, Inc. (NASDAQ:CSGP) offers information, analytics, and online marketplace services to commercial real estate, hospitality, and residential sectors across multiple regions. On February 20, the company reported a Q4 non-GAAP EPS of $0.33 and a revenue of $640 million, exceeding Wall Street estimates by $0.01 and $5.72 million, respectively. 

According to Insider Monkey’s fourth quarter database, 36 hedge funds were bullish on CoStar Group, Inc. (NASDAQ:CSGP), same as the prior quarter. 

Baron Focused Growth Fund stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its fourth quarter 2023 investor letter:

“Core Growth investments, steady growers that continually invest in their businesses for growth and return excess free-cash-flow to shareholders, represented 22.5% of net assets. An example would be CoStar Group, Inc. (NASDAQ:CSGP), a marketing and data analytics provider to the real estate industry. The company continues to add new services in commercial and residential real estate, which have grown its addressable market and enhanced services for its clients. This has improved client retention and cash flow. CoStar continues to invest its cash flow in its business to accelerate growth, which we believe should generate strong returns over time.”

1. Pacer Benchmark Industrial Real Estate SCTR ETF (NYSE:INDS)

5-Year Share Price Performance as of March 29: 37.07%

Pacer Benchmark Industrial Real Estate SCTR ETF (NYSE:INDS) is one of the best real estate ETFs to invest in. Pacer Benchmark Industrial Real Estate SCTR ETF (NYSE:INDS) follows a strategy-driven approach based on tracking the Solactive GPR Industrial Real Estate Index. The ETF focuses on investing in industrial REITs that play key roles in ecommerce distribution and logistics networks, as well as self-storage facilities. As of March 28, 2024, Pacer Benchmark Industrial Real Estate SCTR ETF (NYSE:INDS)’s net assets amounted to nearly $220 million, with a net expense ratio of 0.55% and a portfolio comprising 32 stocks. 

CubeSmart (NYSE:CUBE) is one of the largest holdings of Pacer Benchmark Industrial Real Estate SCTR ETF (NYSE:INDS). CubeSmart (NYSE:CUBE) is a real estate investment trust that manages self-storage properties across the United States. On March 18, CubeSmart declared a $0.51 per share quarterly dividend, in line with previous. The dividend is payable on April 15, to shareholders on record as of April 1. 

According to Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on CubeSmart (NYSE:CUBE), compared to 19 funds in the last quarter. 

Diamond Hill Mid Cap Strategy stated the following regarding CubeSmart (NYSE:CUBE) in its fourth quarter 2023 investor letter:

“Other top contributors in Q4 included CubeSmart (NYSE:CUBE), Webster Financial and Parker-Hannifin. Shares of self-storage real estate investment trust CubeSmart rose as storage rents showed signs of bottoming in Q3, which could boost fundamentals looking forward. Further, REITs more broadly rallied during the quarter as long-term interest rates rapidly declined. Similarly, HSA-focused bank Webster Financial rose alongside financials in the wake of the Fed’s November meeting, which investors broadly interpreted to signal an end to rate hikes and a potential pivot to cuts sometime in 2024. Diversified industrial and aerospace manufacturer Parker-Hannifin’s management team is executing well, diversifying the company beyond heavily cyclical areas to higher-, steadier-growing areas like aerospace and strategically deploying capital — decisions which are contributing to resilient top-line growth and margin expansion.”

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