State Street Real Estate Select Sector SPDR ETF

XLRE

Market cap $7.62B

Both funds are concentrated in large-cap U.S. REITs, with nearly identical top holdings and sector exposures. XLRE charges a lower expense ratio and has a higher dividend yield compared to ICF.

REITs, after years of underperformance, are now attractively valued and poised for strong returns over the next 12–18 months. VICI Properties, NNN REIT, and Agree Realty offer robust yields, improving fundamentals, and raised guidance despite sector headwinds. VICI and NNN face tenant-specific risks, but their balance sheets, liquidity, and long-term growth prospects support a bullish outlook.

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VNQ holds over five times more assets under management than XLRE and owns a much broader mix of real estate stocks Both ETFs delivered identical 1-year returns and saw similar growth of $1,000 over five years VNQ yields 0.5 percentage points more than XLRE and has an expense ratio of 0.13%, compared to XLRE's 0.08%. These 10 Stocks Could Mint the Next Wave of Millionaires ›

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With a slower economy and higher unemployment, construction took a hit in 2025. Experts and research firms forecast a year of stabilization and recovery for commercial real estate in 2026.

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The Real Estate Select Sector SPDR Fund ( NYSEARCA:XLRE ) has spent 2025 in the penalty box and looks poised to close the year

I am initiating coverage of Real Estate Select Sector SPDR Fund ETF with a Sell rating due to ongoing sector headwinds. XLRE underperforms equities and bonds, with concentrated exposure and limited diversification compared to VNQ and IYR. Rising rates, inflation risk, and potential economic weakness present significant downside for XLRE, with a projected 15.7% price decline possible.