Key Points
- State Street SPDR Dow Jones REIT ETF offers a more cost-effective entry into real estate with an expense ratio half that of its global counterpart.
- State Street SPDR Dow Jones Global Real Estate ETF provides broader geographic diversification across U.S., developed, and emerging markets.
- State Street SPDR Dow Jones REIT ETF focuses exclusively on U.S. markets and has delivered higher 1-year total returns recently.
The State Street SPDR Dow Jones REIT ETF (RWR -0.07%) offers a lower-cost, U.S.-focused alternative to the globally diversified State Street SPDR Dow Jones Global Real Estate ETF (RWO -0.14%).
Selecting between these two real estate funds often comes down to a preference for domestic focus versus global reach. While both products are issued by State Street, they provide distinct lenses into the property market, ranging from the concentrated U.S. REIT sector to a more expansive portfolio of international and emerging market real estate companies that may provide broader diversification benefits.
RWR & RWO: Performance Comparison
Key Financial Metrics
Snapshot (cost & size)
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-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost is a significant differentiator here, as the State Street SPDR Dow Jones REIT ETF charges a 0.25% expense ratio, making it half as expensive as its global peer. While the yield gap is minimal, investors focused on maximizing net returns may find the lower fee structure of the domestic fund more appealing over the long run.
Performance & risk comparison
What's inside
State Street SPDR Dow Jones REIT ETF tracks the Dow Jones U.S. Select REIT Capped Index, providing investors with a portfolio focused 100% on U.S. Real Estate. The fund currently manages 95 holdings, predominantly U.S.-based real estate investment trusts. Its largest positions include Welltower (WELL -0.19%) at 10.01%, Prologis (PLD +0.09%) at 9.96%, and Simon Property Group (SPG -0.27%) at 4.53%. This domestic strategy provides a liquid way to target U.S. commercial and residential property trends. It was launched in 2001. State Street SPDR Dow Jones REIT ETF has paid $3.77 per share over the trailing 12 months, which on its recent ~$112.67 share price works out to a 3.4% yield.
State Street SPDR Dow Jones Global Real Estate ETF seeks to track the Dow Jones Global Select Real Estate Securities IndexSM, offering a 100% Real Estate tilt but with a larger pool of 221 holdings. This fund includes international developed and emerging markets alongside U.S. equities. Its largest positions include Welltower at 10.54%, Prologis at 7.30%, and Equinix (EQIX -1.77%) at 6.12%. Companies in the index must meet specific size and revenue requirements, ensuring they are primarily focused on owning and operating real estate. It was launched in 2008. State Street SPDR Dow Jones Global Real Estate ETF has paid $1.63 per share over the trailing 12 months, which on its recent ~$49.25 share price works out to a 3.3% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
I'd go with the State Street SPDR Dow Jones REIT ETF (RWR), because it gives you almost the same real estate holdings as RWO for half the cost. Real estate stocks tend to struggle when interest rates rise, and the Federal Reserve raised rates again in September, so keeping fees low matters. RWR charges 0.25% while RWO charges 0.50%. When returns are harder to come by, the fund that costs less leaves more money in your pocket.
RWO adds international properties, but most of its money is still in U.S. real estate, and its biggest holdings, Welltower, Prologis, and Equinix, are the same ones RWR owns. So the extra fee buys you very little. RWR has also come out ahead, outperforming RWO over the past year and the past five years, and it pays a slightly higher yield, around 3.3% versus 3.2%.
RWO is fine if you want a small slice of overseas property in one fund. For most long-term investors, RWR is the cheaper and better-performing way to own real estate.
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