A Real Estate ETF Worth Keeping Your Eye On | by Tunji Onigbanjo | Apr, 2022

Keep track of leading companies that purchase and operate real property

Photo by Jason Dent on Unsplash

Real estate is real property that consists of land and buildings on it. It also includes natural resources found on the land. Examples of real estate include single-family homes, apartments, offices, hotels, hospitals, and farms. Real estate is everywhere you go and look. You are currently in a piece of property that is real estate.

When it comes to gaining investment exposure through the stock market to companies that own, operate, and finance real property, you can do so by investing in Real Estate Investment Trusts (REITs). If you want a simpler approach, there is an ETF that provides exposure to the leading REITs. That ETF is the Vanguard Real Estate ETF (VNQ).

The primary goal of VNQ is to closely track the MSCI US Investable Market Real Estate 25/50 Index, which is designed to capture the large-, mid-, and small-cap segments of stocks issued by REITs in the US equity universe. Vanguard states that the ETF offers a high potential for investment income and some growth.

The top holdings of VNQ include American Tower (AMT), Prologis (PLD), Crown Castle International (CCI), Equinix (EQIX), Public Storage (PSA), Digital Realty Trust (DLR), and Simon Property Group (SPG). As of April 27th, 2022, VNQ has a price of $106.97 per share, net assets of $86.33 billion, and an expense ratio of 0.12%. Over the past five years, VNQ has provided a total return of approximately 56% and an average annual total return of approximately 9%, with dividends reinvested.

VNQ is a leading real estate ETF. Other real estate ETFs include The Real Estate Select Sector SPDR Fund (XLRE) and the iShares US Real Estate ETF (IYR). Real estate has its performance cycles, but it is an asset class that is not going anywhere. Let me know in the comments your preferred real estate ETF that is worth keeping an eye on.