RWR vs. XLRE: Which Real Estate ETF Is the Better Buy?
Key Points
The SPDR Dow Jones REIT ETF (RWR) offers broader diversification with 97 holdings, compared to 31 for the S&P 500-focused Real Estate Select Sector SPDR Fund (XLRE) .
XLRE offers a significant cost advantage, with an expense ratio of just 0.08% versus RWR's 0.25%.
RWR has posted stronger returns than XLRE over the past one- and five-year periods.
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Both of these funds provide investors with exposure to the property market without the hassle of buying physical real estate. But while the State Street Real Estate Select Sector SPDR ETF (NYSEMKT:XLRE) limits its scope to real estate companies within the S&P 500, the State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) casts a wider net across the broader domestic REIT landscape -- resulting in a more diversified, but pricier, portfolio.
Snapshot (cost & size)
| Metric | XLRE | RWR |
|---|---|---|
| Issuer | State Street | State Street |
| Expense ratio | 0.08% | 0.25% |
| 1-year return (as of July 27, 2026) | 10.60% | 25.08% |
| Dividend yield | 3.19% | 3.35% |
| Beta | 0.99 | 0.98 |
| AUM | $8.1 billion | $1.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Investors pay a premium for RWR's broader reach: its 0.25% expense ratio is roughly three times XLRE's 0.08% fee. RWR has also delivered the stronger return over the last 12 months and pays a slightly higher dividend yield than XLRE.
Performance & risk comparison
| Metric | XLRE | RWR |
|---|---|---|
| Max drawdown (5 yr) | (34.11%) | (32.56%) |
| Growth of $1,000 over 5 years (total return) | $1,173 | $1,294 |
What's inside
Launched in 2001, RWR spreads its portfolio across 97 positions. Its top holdings are Welltower (NYSE:WELL) at 10.5%, Prologis (NYSE:PLD) at 9.1%, and Simon Property Group (NYSE:SPG) at 4.6%.
XLRE is far more concentrated, with just 31 holdings. Its largest positions are Welltower (NYSE:WELL) at 11.0%, Prologis (NYSE:PLD) at 8.7%, and Equinix (NASDAQ:EQIX) at 7.1%. XLRE was launched in 2015.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The biggest difference between these two funds involves a familiar trade-off: breadth versus cost.
RWR's 97-holding portfolio gives investors exposure to a wider slice of the REIT universe -- including smaller and mid-cap names that aren’t part of the S&P 500 -- which helps explain its stronger recent performance. XLRE, by contrast, sticks to S&P 500 real estate companies, resulting in a leaner, more concentrated fund that costs a third as much to hold.
Expense ratios might look small in isolation, but they compound over time -- which can make a significant difference in returns over a multi-decade holding period.
It's also worth noting that both funds lean heavily on the same top holdings, Welltower and Prologis, even though their performance over the past year doesn’t look that similar. RWR's higher fees and wider net haven’t hurt its returns; its 25% one-year gain suggests diversification into non-S&P 500 REITs has helped it significantly outperform XLRE over the same stretch.
For investors who want a single-fund real estate holding, XLRE's lower cost and blue chip concentration may be the simpler choice. Those looking for broader real estate exposure -- including specialty REITs outside the S&P 500 -- may find RWR's extra diversification worth the extra fees.
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Andy Gould has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equinix, Prologis, and Simon Property Group. The Motley Fool has a disclosure policy.
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