REET vs HAUZ: Global Real Estate ETF Showdown

The iShares Global REIT ETF (NYSEMKT:REET) provides broad exposure to global real estate, including the U.S., while the Xtrackers International Real Estate ETF (NYSEMKT:HAUZ) targets developed and emerging markets, excluding the United States.

Real estate investment trusts (REITs) offer a path to portfolio diversification and income. While both funds track real estate equities, REET includes domestic giants that HAUZ excludes. This distinction creates different risk profiles and return potentials for investors seeking global property exposure through a single vehicle.

Additionally, the iShares fund manages a significantly larger amount of assets under management (AUM), which often appeals to institutional investors looking for higher trading liquidity.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

HAUZ is the more affordable option with a 0.10% expense ratio, saving investors $0.40 annually per $1,000 invested compared to REET. Additionally, HAUZ offers a higher trailing-12-month dividend yield of 3.60% versus 3.30% for its competitor.

Performance & risk comparison

What's inside

The iShares Global REIT ETF tracks the FTSE EPRA/Nareit Global REIT Index to capture the performance of publicly listed real estate trusts across both developed and emerging markets. Its portfolio consists of 390 holdings, with its largest positions in Welltower (9.02%), Prologis (7.18%), and Equinix (5.45%). This global approach includes significant U.S. exposure, which distinguishes it from ex-U.S. funds.

The fund was launched in 2014. iShares Global REIT ETF has paid $0.93 per share over the trailing 12 months, which, on its recent $28.56 share price, works out to a 3.25% yield.

The Xtrackers International Real Estate ETF follows the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index, focusing on property markets outside the United States. Its portfolio is slightly more diversified by count with 418 holdings, though its largest positions include Goodman Group (4.30%), Mitsubishi Estate (3.27%), and Mitsui Fudosan (2.68%). This strategy allows investors to isolate international property trends without domestic overlap.

The fund was launched in 2013. Xtrackers International Real Estate ETF has paid $0.82 per share over the trailing 12 months, which, at its recent $22.95 share price, works out to a 3.57% yield.

For more guidance on ETF investing, check out the full guide at this link.

What does this mean for investors?

These funds can work as complementary real estate ETFs, given REET’s focus on U.S. real estate and HAUZ’s international exposure. However, REET has been the marginally better performer over the past one- and five-year period.

REET’s superior performance is despite HAUZ offering a higher dividend yield, showing that sometimes yield isn’t everything in determining returns from real estate funds.

Investors will want to pay attention to shifts in interest rates. This certainly impacted the underperformance of these funds over the past five years relative to the broader stock market. Stabilizing interest rates over the past year has been a catalyst for better returns from both funds. Improving fundamentals and the prospect of lower interest rates could make these funds attractive options for a long-term investor.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equinix and Prologis. The Motley Fool has a disclosure policy.