Real estate investment trusts, or REITs, are popular long-term investments with income investors because of their attractive yields. Some investors own REITs as a way to diversify their investment portfolios, too.
After lagging the broad US stock market during the past several years, REITs have staged a comeback in 2026.
Rather than buy one or more REITs individually, income investors can get exposure to a collection of REITs through a real estate exchange-traded fund.
What Is a Real Estate ETF?
Real estate ETFs are managed products that invest in a basket of real estate operating companies and/or REITs.
The biggest difference between the two is that REOCs typically reinvest profits back into their businesses, while REITs must pay out 90% of their taxable income to shareholders as dividends. As a result of their legal structure, REITs typically offer attractive yields, and that has made REITs the investment of choice for most real estate ETFs.
ETFs that invest in real estate stocks can be simple one-stop solutions for a few reasons:
- REIT ETFs maintain a portfolio of real estate stocks and thereby provide instant diversification within the sector.
- REIT ETFs are, in general, low-cost.
- Real estate ETFs are easy to buy and sell; many of the best REIT ETFs are managed by popular asset managers with brokerage platforms.
Those investors who’d like to get exposure to real estate stocks through an ETF have several highly rated REIT ETFs to choose from.
The 5 Best REIT ETFs to Buy in 2026
To come up with our list of the best REIT ETFs, we screened on the following:
- ETFs that land in one of Morningstar’s two real estate categories
- ETFs in those categories that earn Morningstar Medalist Ratings of Bronze or higher with 100% analyst coverage.
All data is as of March 6, 2026.
- Dimensional US Real Estate ETF DFAR
- Schwab US REIT ETF SCHH
- SPDR Dow Jones Global Real Estate ETF RWO
- Vanguard Global ex-US Real Estate ETF VNQI
- Vanguard Real Estate ETF VNQ
Morningstar expects the highly rated real estate ETFs on this list to outperform their peers over a full market cycle. But even though the funds on our list of the top REIT ETFs all focus on real estate, they practice very different strategies, and as a result, they can behave very differently from each other. Investors need to do some homework to understand exactly what a particular REIT ETF invests in before buying.
Here are a couple of things for investors to think about as they research the funds on our list of top-rated REIT ETFs to buy.
Do I want an active REIT ETF or a passive REIT ETF? Most real estate ETFs are passive investments, which means they’re tracking a particular index; there’s no manager actively picking stocks. Just one of the names on our list of top REIT ETFs is actively managed.
Do I want an ETF that sticks with US REITs or one that includes non-US real estate stocks? Three of the funds on our list of top real estate ETFs focus on US real estate, one invests in US and non-US real estate, and one focuses exclusively on non-US real estate. Why go international with a real estate ETF? Geographical diversification, for one. Non-US real estate stocks often provide higher yields than their US counterparts, too.
Here’s a quick look at each of the best REIT ETFs. Be sure to review an ETF’s complete report for more details.
Dimensional US Real Estate ETF
- Morningstar Medalist Rating: Gold
- Morningstar Category: Real Estate
- Active or Index? Active
- Index Tracked: N/A
- Yield: 2.69%
The only Gold-rated fund on our list of the best REIT ETFs to invest in, Dimensional US Real Estate ETF follows an active rules-based strategy that provides exposure to a broad swath of US REITs. A sound investment process and strong management team underpin the ETF’s high rating.
Read Morningstar’s full report on Dimensional US Real Estate ETF.
Schwab US REIT ETF
- Morningstar Medalist Rating: Silver
- Morningstar Category: Real Estate
- Active or Index? Index
- Index Tracked: Dow Jones Equity All REIT Capped Index
- Yield: 2.76%
The first of several index funds on our list of the best real estate ETFs, Schwab US REIT provides pure exposure to domestic REITs. The Dow Jones Equity All REIT Capped Index includes liquid US REITs with market caps above $200 million and weights them by market capitalization.
Read Morningstar’s full report on Schwab US REIT ETF.
State Street SPDR Dow Jones Global Real Estate ETF
- Morningstar Medalist Rating: Bronze
- Morningstar Category: Global Real Estate
- Active or Index? Index
- Index Tracked: Dow Jones Global Select Real Estate Securities Index
- Yield: 3.27%
The first global real estate fund on our list of REIT ETFs to buy, SPDR Dow Jones Global Real Estate ETF holds about 28% of its portfolio in non-US real estate. More than 90% of the index this ETF tracks comprises REITs. The Dow Jones Global Select Real Estate Securities Index includes large, liquid REITs and real estate operating companies from around the world weighted by market capitalization.
Read Morningstar’s full report on SPDR Dow Jones Global Real Estate ETF.
Vanguard Global Ex-US Real Estate ETF
- Morningstar Medalist Rating: Bronze
- Morningstar Category: Global Real Estate
- Active or Index? Index
- Index Tracked: S&P Global ex-US Property Index
- Yield: 4.25%
The highest-yielding ETF on our list of the top real estate ETFs to buy, Vanguard Global ex-US Real Estate ETF excludes US REITs from its portfolio. Asian real estate securities dominate the portfolio, and, as a result, the fund’s category-relative performance can fluctuate with the broad Asia-Pacific market. Also notably, its portfolio is skewed more toward real estate stocks instead of REITs.
Read Morningstar’s full report on Vanguard Global ex-US Real Estate ETF.
Vanguard Real Estate ETF
- Morningstar Medalist Rating: Silver
- Morningstar Category: Real Estate
- Active or Index? Index
- Index Tracked: MSCI US Investable Market Real Estate 25/50 Index
- Yield: 3.63%
Vanguard Real Estate ETF is by far the most popular and largest name on our list of top REIT ETFs to buy. Its portfolio features REITs, as well as real estate management and development firms.
Read Morningstar’s full report on Vanguard Real Estate ETF.
Pros and Cons of Investing in REIT ETFs
REIT ETFs provide investors with access to a diversified portfolio of real estate securities, thereby reducing per-issue risk. Real estate ETFs also tend to be low-cost and offer attractive yields.
But given their income focus, REIT ETFs aren’t as tax-efficient as other types of ETFs that do not invest in dividend-paying stocks.
Real estate ETFs typically perform best when interest rates are falling or when the economy is strengthening. They often underperform when interest rates rise or the economy weakens.
Although real estate is often touted as a diversifier in an investment portfolio, recent research from Morningstar suggests that the asset class has become a less effective diversifier over time.
“In the past, real estate has had relatively low correlations with the broader US equity market,” explains Morningstar portfolio strategist Amy Arnott. “In recent years, however, real estate has generally moved more in tandem with the broader US equity market.”
How to Find More Top REIT ETFs to Buy
Use these Morningstar resources to help find more REIT ETFs to research further:
- Review Morningstar’s list of Real Estate Medalist Funds, which includes top-rated ETFs and mutual funds.
- Research real estate ETFs based on your personal selection criteria by using our Morningstar Investor Screener. The tool, which is available to Morningstar Investor members, allows investors to screen and rank REIT ETFs based on various criteria.
- Interested in assembling your own basket of REITs instead of buying a REIT ETF? Review Morningstar’s list of The Best REITs to Buy.
- Visit Morningstar’s real estate sector page for the latest articles and videos about REITs.