What Are Some Good REIT Index Funds?


Quick Answer

The Vanguard REIT ETF and the SPDR Dow Jones REIT ETF are two top-rated real estate investment trust index funds as of 2015, according to U.S. News and World Report Money. The real estate investment trust Simon Property Group Inc. represents a large percentage of each fund’s assets.

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Full Answer

Real estate investment trusts, known as REITs, provide investors with long-term income potential during periods of low-interest rates, explains Investopedia. The Vanguard ETF contains a diversified portfolio of companies that invest in real estate, and the fund’s cost rating is one of the lowest in the industry, with U.S. News and World Report giving the fund an excellent rating.

The SPDR Dow Jones REIT ETF is a smaller fund compared to the Vanguard fund, but the expense ratio is 0.25 percent less than the Vanguard fund, notes Investopedia. As of 2015, the Vanguard fund reports a market capitalization of $25.54 billion, while the SPDR Dow Jones fund reports a $3.05 billion market cap. Both ETFs receive the classification “large-cap funds” because both funds invest in companies that buy land and developments leased by large companies. For example, the Simon Property Group is the largest REIT in the United States, and the company focuses on purchasing shopping malls that house well-known retail giants such as Walgreens and CVS Pharmacy.

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