Guide · Real Estate
Best REIT ETFs
REIT funds own listed property companies, not buildings. Prologis, American Tower, Welltower, and Equinix dominate every fund in the table. VTI already holds REITs at about 2–3% of the market; a dedicated sleeve is an overweight. Distributions are mostly non-qualified, which is the tax problem.
Published May 18, 2026 · Updated Sep 16, 2026 · Fund data as of Oct 24, 2026
Why the ranking looks like this
The four catalog REIT funds run 7–13 bps in fees and all four hold a similar group of large US REITs (Prologis, American Tower, Welltower, Equinix dominate). The score primarily rewards SCHH and USRT for tighter cost and a slightly leaner holdings list; the larger Vanguard fund (VNQ) is the most-discussed on Bogleheads but is mildly more expensive than the Schwab and iShares cores.
See the methodology for the full formula behind each sub-score.
The funds
This order is editorial. The composite on each card is live. The full score-ranked table is on the category page.
-
80
composite / 100
Schwab's US REIT fund. 7 bps and a clean Dow Jones US Select REIT index — excludes mortgage REITs and timber, so it's a "pure equity REIT" exposure. Highest-scoring catalog fund in the category.
- Expense
- 0.070%
- AUM
- $10.56B
- Issuer
- Schwab
- Detail
- SCHH page →
-
76
composite / 100
Vanguard's flagship real-estate fund and the largest by AUM by a wide margin. 13 bps; tracks MSCI US Investable Market Real Estate 25/50, which includes mortgage REITs and a small specialty-REIT slice. The default fund cited in Boglehead real-estate-sleeve discussions.
- Expense
- 0.13%
- AUM
- $66.42B†
- Issuer
- Vanguard
- Detail
- VNQ page →
-
76
composite / 100
iShares' Core US REIT fund. 8 bps and an equity-REIT-only index — closely tracks SCHH in exposure and cost. Works as a tax-loss-harvesting partner to VNQ.
- Expense
- 0.080%
- AUM
- $4.31B
- Issuer
- iShares
- Detail
- USRT page →
-
76
composite / 100
State Street's real-estate sector SPDR. 8 bps; tracks the S&P 500 real-estate sector only, so it holds ~30 large-cap REITs rather than the ~100+ in a broader fund. Concentrated, but the concentration is in the names that dominate the broader funds anyway.
- Expense
- 0.080%
- AUM
- $7.65B
- Issuer
- State Street
- Detail
- XLRE page →
† Whole fund: this ETF is one share class of a fund that also sells mutual-fund shares, and the figure covers all of them. Our sources don't report the ETF class on its own.
Also in the category
Other funds in the same category, ranked by composite score.
Why REITs are tax-inefficient in a taxable account
REIT distributions are mostly non-qualified — taxed at ordinary income rates rather than the lower qualified-dividend rate. The 199A pass-through deduction lets you deduct 20% of qualifying REIT dividends from taxable income, trimming the effective rate on that portion by about a fifth (e.g. a 24% bracket holder pays roughly 19% rather than 24% on the qualifying share). The rest of the distribution still creates a meaningful tax drag at typical income tax brackets, which is why the methodology page sets REITs at a 30 base on tax efficiency. Holding REITs in an IRA or Roth eliminates the drag entirely.
Do you need a REIT fund if you hold a total-market fund?
A US total-market fund (VTI / ITOT) already holds REITs at their market-cap weight — roughly 2–3% of the fund. A dedicated REIT sleeve overweights real estate by deliberate choice; the case for it rests on whether you believe real estate offers diversification beyond what an equal-weight market position provides. Bogleheads forum opinion is split; the methodology is agnostic.
Funds are pulled from the live composite for this category. Notes are editorial and refresh with the catalog.
PlainIndex publishes data and editorial commentary — nothing here is personalized investment advice. Read the methodology for how the scores referenced here are computed.