GQRE vs. ICF: A Matchup of Two Real Estate ETFs

The iShares Select U.S. REIT ETF (NYSEMKT:ICF) keeps costs lower and has outperformed over five years, while the FlexShares Global Quality Real Estate Index Fund(NYSEMKT:GQRE)offers global diversification and a much higher yield, though at a higher fee.

Both ICF and GQRE aim to deliver real estate exposure through baskets of REITs, but their approaches diverge: ICF focuses exclusively on U.S. names, while GQRE spans global markets with a quality filter. This comparison looks at cost, performance, risk, and what each fund actually owns.

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.

ICF looks more affordable on fees, while GQRE commands a premium but compensates with a higher payout, offering a 1.8 percentage point yield advantage for income-focused investors.

Performance & risk comparison

What's inside

GQRE tracks a global real estate index, holding 219 securities with a strict quality overlay and 100% real estate allocation, and has been around for more than 12 years. Its top holdings include American Tower Corp Reit(NYSE:AMT), Prologis Inc Reit(NYSE:PLD), and Welltower Inc(NYSE:WELL), with no unusual quirks or leverage resets, making it a straightforward global REIT play.

By contrast, ICF focuses solely on the U.S. real estate sector and holds just 30 names, heavily weighted toward large, established REITs such as Equinix Reit Inc (NASDAQ:EQIX), Welltower Inc, and American Tower Reit Corp. Both funds are pure real estate, but ICF is far more concentrated and U.S.-centric.

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What this means for investors

Real estate exchange-traded funds (ETFs) can be a great way for average investors to add real estate exposure to their portfolios. Let’s dive into a head-to-head comparison between the iShares Select U.S. REIT ETF (ICF) and the FlexShares Global Quality Real Estate Index Fund (GQRE).

Starting with ICF, this fund has several advantages. First, it has a lower expense ratio than GQRE (0.32% vs. 0.46%). Second, it has a significantly higher AUM of $2.6 billion vs. $0.3 billion for its rival. That makes it easier for investors to buy and sell shares, particularly in volatile conditions. Lastly, ICF focuses solely on the U.S. market and has only 30 holdings. That makes it ideal for investors with a domestic focus or those who want a lower level of diversification in their real estate ETF.

Turning to GQRE, it also has an edge in some areas. First, GQRE has achieved a better return over the past year (6.4% vs. 4.2%). It also has a significantly higher dividend yield (4.5% vs. 2.7%).

In summary, ICF is better suited for cost-conscious investors and those who want to own only U.S.-based stocks. GQRE, on the other hand, delivers higher income thanks to its higher dividend yield and can claim a higher return over the past year. As always, investors must weigh these differences against their personal preferences and investment goals.

Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Tower, Equinix, and Prologis. The Motley Fool has a disclosure policy.