Exchange Traded Funds (ETFs)

Special 10-Part Series on the Premier Sector Funds: Taking up Real Estate in Investors’ Minds

Real Estate is not a new asset class in terms of building wealth. Yet, because of its illiquidity and the potential headaches of property management, investors may crave an alternate way to make money on property.

While real estate can still be volatile, as is true with every asset class, the sector is a backbone to the American economy. Investment in this area can allow investors to benefit from future urbanization and development trends as the country continues to grow and innovate.

This exchange-traded fund (ETF), which gives exposure to the real estate sector without actual investment in the property itself, is a new spin on a classic investment.

Real Estate Select Sector SPDR Fund (XLRE) is an ETF that invests at least 95% of its total assets in the securities comprising the real estate index. The index includes stocks that have been identified as Real Estate companies by the Global Industry Classification Standard.

XLRE includes companies from real estate management and development, as well as most REITs. The fund specifically excludes mortgage REITs.

REITs offer investors the benefits of real estate investment, along with the ease and advantages of investing in a publicly traded stock, without the added headaches of actual property management. REITs have provided investors with dividend-based income opportunities, transparency, liquidity, inflation protection and diversification within their portfolios.

By including multiple REITs within the funds over 30 holdings, XLRE allows for an even more diversified approach.

The firms top 10 holdings, which make up 59.90% of the total ETF, include Prologis, Inc. (PLD), Equinix, Inc. (EQX), American Tower Corporation (AMT), Welltower Inc. (WELL), Digital Reality Trust, Inc. (DLR), Simon Property, Inc. (SPG), Public Storage (PSA), Reality Income Corporation (O), CBRE Group, Inc. (CBRE) and Crown Castle Inc. (CCI).

Exclusive ETF Talk: Finding Value in Your Brokerage

Chart courtesy of Stockcharts.com.

As shown by the chart above, XLRE saw growth last year and has already moved higher from its dip in early 2025.

The fund’s year-to-date total daily return is 2.16%, with a price-to-earnings ratio of 37.09 and an expense ratio of 0.09%.

XLRE provides an opportunity to get in on the well-known wealth builder that is real estate, without the stress of picking individual REITs or visiting physical properties, which in turn, can produce profits.

As is true with the other sector ETFs we have discussed thus far in our 10-part sector series, XLRE lets you spread out your portfolio, not putting all of your eggs in one basket.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.