The State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) and the Xtrackers International Real Estate ETF (NYSEMKT:HAUZ) both offer exposure to the real estate sector, but they focus on entirely different geographic regions. Real estate investment trusts can provide income and diversification, but the choice between these two funds really comes down to whether an investor wants domestic or international exposure. RWR tracks publicly traded REITs in the United States, while HAUZ targets developed and emerging markets outside the U.S.
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.
HAUZ is the cheaper option with a 0.1% expense ratio compared to 0.25% for RWR. HAUZ also offers a higher dividend yield of 3.52% -- more than a quarter of a percentage point higher than RWR's 3.26%. Growth of $1,000 over 5 years (total return) RWR has posted a notably strong 23.7% total return over the past year, outpacing the performance of international real estate over the same period.
RWR has also outperformed HAUZ by a wide margin over the trailing five years, suggesting U.S. REITs have been the more rewarding corner of the real estate market for a sustained stretch, not just a recent quarter or two. That outperformance doesn't appear to be a function of added risk-taking, though -- RWR's beta of 0.97 and HAUZ's beta of 0.99 are both close to 1, meaning each fund moves roughly in line with the broader market.
Launched in 2001, RWR provides access to a portfolio of publicly traded REITs operating within the United States. The fund holds 96 positions, led by Welltower (NYSE:WELL) at 10.6%, Prologis (NYSE:PLD) at 9.5%, and Digital Realty Trust (NYSE:DLR) at 4.7%. HAUZ was designed to mirror the performance of international real estate markets outside the U.S.
It's far more broadly diversified, holding 416 positions. Its top holdings include Goodman Group (ASX:GMG) at 4.2%, Mitsubishi Estate (OTC:MITEF) at 3.1%, and Mitsui Fudosan (TYO:8801) at 2.7%. HAUZ was launched in 2013.
Extract — continue reading at the source.
