Real estate exchange-traded funds (ETFs) hold baskets of securities in the real estate sector, providing an investors with a way to investing in an otherwise high-cost area. These funds often focus specifically on real estate investment trusts (REIT), securitized portfolios of real estate properties which offer income potential associated with real estate as well as the liquidity of traditional stocks. Some of the major names in the REIT space include Vornado Realty Trust (VNO) and Welltower, Inc. (WELL). Investing in these and other REITs allows investors to receive dividend distributions. While the financial returns could be lower than owning an entire building and was able to pocket all the income, there is less risk.

There are about 40 ETFs focused on the REIT universe, excluding leveraged and inverse ETFs. The best REIT ETF is the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR). All numbers in this story are as of February 5, 2020. We examine the top 3 best REIT ETFs below.

Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR)

  • Performance over 1-Year: 31.6%
  • Expense Ratio: 0.60%
  • Annual Dividend Yield: 1.57%
  • 3-Month Average Daily Trading Volume: 82,513
  • Assets Under Management: $250.5 million
  • Inception Date: May 15, 2018
  • Issuing Company: Pacer Financial

SRVR tracks the Benchmark Data & Infrastructure Real Estate SCTR Index, an index of U.S.-listed companies deriving at least 85% of revenue from real estate operations specifically in the data and infrastructure areas. SRVR is a multi-cap fund. As of February 5, 2020, the ETF's top three holdings include Crown Castle International Corp. (CCI) and American Tower Corp. (AMT), both wireless communications REITs, and Equinix, Inc. (EQIX), a colocation space REIT.

Pacer Benchmark Industrial Real Estate SCTR ETF (INDS)

  • Performance over 1-Year: 30.0%
  • Expense Ratio: 0.60%
  • Annual Dividend Yield: 2.16%
  • 3-Month Average Daily Trading Volume: 18,863
  • Assets Under Management: $42.2 million
  • Inception Date: May 14, 2018
  • Issuing Company: Pacer Financial

INDS tracks the Benchmark Industrial Real Estate SCTR Index, an index of U.S.-listed companies deriving at least 85% of revenue from real estate operations specifically in the industrial and self-storage areas. INDS is a multi-cap fund. As of February 5, 2020, the ETF's top three holdings include Prologis, Inc. (PLD), a warehouse REIT, Duke Realty Corp. (DRE), an industrial and office space REIT, and Innovative Industrial Properties, inc. (IIPR), a cannabis facilities REIT.

U.S. Diversified Real Estate ETF (PPTY)

  • Performance over 1-Year: 18.8%
  • Expense Ratio: 0.53%
  • Annual Dividend Yield: 2.98%
  • 3-Month Average Daily Trading Volume: 12,879
  • Assets Under Management: $133.2 million
  • Inception Date: March 27, 2018
  • Issuing Company: Exchange Traded Concepts

PPTY tracks the U.S. Diversified Real Estate Index, an index of U.S.-listed companies balanced to represent a variety of geographic regions and property types. PPTY is a multi-cap fund. As of February 5, 2020, the ETF's top three holdings include Prologis, Inc., AvalonBay Communities, Inc. (AVB), a metropolitan U.S. apartment REIT, and Equinix, Inc. (EQIX).