ICF vs. XLRE: Real Estate ETFs That Can Build Up Your Portfolio

Core Viewpoint - The State Street Real Estate Select Sector SPDR ETF (XLRE) and iShares Select US REIT ETF (ICF) provide diversified access to U.S. real estate investment trusts (REITs), with notable differences in cost, yield, and performance metrics that investors should consider. Cost & Size Comparison - XLRE has an expense ratio of 0.08%, significantly lower than ICF's 0.32% [2] - XLRE's one-year return is 1.38%, compared to ICF's 0.97% [2] - XLRE offers a higher dividend yield of 3.45% versus ICF's 2.88% [2] - XLRE has assets under management (AUM) of $7.4 billion, while ICF has $1.9 billion [2] Performance & Risk Comparison - The maximum drawdown over five years for XLRE is 34.11%, slightly better than ICF's 34.75% [4] - The growth of $1,000 over five years is $1,111 for XLRE and $1,121 for ICF, indicating similar performance [4] Holdings Composition - ICF holds 34 U.S. REITs, focusing primarily on equity REITs, with major positions in Prologis, Welltower, and American Tower, which together account for about 25% of the fund [5] - XLRE also holds 34 assets but includes both REITs and S&P 500 companies involved in real estate, contributing to its higher AUM despite being younger than ICF by 14 years [6] Dividend Payout Analysis - XLRE has a payout ratio of 124.09%, indicating that its dividend payments exceed its earnings, which may raise sustainability concerns [9] - In contrast, ICF's payout ratio is 91.97%, aligning closely with the typical REIT requirement to distribute 90% of taxable income as dividends [9] - Investors are advised to monitor XLRE's upcoming quarterly dividend payment, expected around mid-March 2026, due to its high payout ratio [9]