The Vanguard Real Estate ETF (VNQ) holds over five times more assets under management than the State Street Real Estate Select Sector SPDR ETF (XLRE) and offers a broader mix of real estate stocks. Both ETFs have delivered identical 1-year returns and saw similar growth over five years. VNQ yields 0.5 percentage points more than XLRE and has a slightly higher expense ratio at 0.13%.

XLRE and VNQ differ in breadth and AUM, with VNQ offering more holdings and a larger AUM. XLRE focuses narrowly on S&P 500 real estate names, while VNQ casts a wider net across large, mid, and small-cap REITs. Investors can choose based on cost, yield, diversification, and risk preferences.

XLRE has a lower expense ratio of 0.08% compared to VNQ’s 0.13%, but VNQ offers a higher yield at 3.9% versus XLRE’s 3.4%. Growth of $1,000 over five years was $1,119 for XLRE and $1,053 for VNQ. Beta measures price volatility relative to the S&P 500.

VNQ manages $65.4 billion across 158 holdings, dominated by real estate companies. XLRE focuses exclusively on real estate stocks in the S&P 500, resulting in a more concentrated portfolio of 31 holdings. Neither fund carries structural quirks or leverages, and both exclude mortgage REITs.

For investors, choosing between XLRE and VNQ depends on coverage versus control. VNQ offers diversification across the REIT landscape, while XLRE provides focused exposure to S&P 500 real estate names. The most suitable ETF depends on portfolio goals.

The biggest difference between XLRE and VNQ lies in their approach to real estate stock exposure. VNQ offers broad diversification across large-, mid-, and small-cap REITs, while XLRE focuses on a more concentrated portfolio of S&P 500 real estate names. Investors can choose based on their preference for broad exposure or sector-specific concentration.

Read more at Yahoo Finance: a Targeted Sector Approach or Broad Real Estate Exposure