DFAR vs FREL

DFARADFA Real Estate Securities Portfolio ETF Class Shares

FRELAFidelity MSCI Real Estate Index ETF

In short

DFAR Dimensional's take on US property: roughly 130 real estate names for 0.19% a year, while the typical peer in the category charges about double. A 2022 arrival that does one job and stays inside the lines.

FREL Fidelity's take on US real estate: one index, about 150 property stocks, and a 0.08% fee against a 0.37% category median. Cheap beta on landlords, and one of the strongest implementations in its peer group.

Stated mandate

DFAR The fund seeks to achieve long-term capital appreciation.

FREL The fund seeks to track, before fees and expenses, the performance of the MSCI USA IMI Real Estate Index.

Why people hold it

• DFAR 0.19% a year against a real estate cohort median near 0.37%. Sector funds rarely hand back that much of the toll.
• The label and the portfolio match: broad US real estate, no drift into adjacent sectors. One of the tighter mandate implementations among its two dozen category rivals.
• Roughly 130 holdings, so no single landlord runs the show. A multi-billion-dollar fund that trades actively, which helps keep buying and selling costs modest.
• Rent shows up on a schedule: the fund distributes quarterly, and the stated goal is long-term capital appreciation.

• FREL 0.08% a year against a 0.37% median for US real estate funds. Among the category's leaders, only SCHH runs cheaper, and only by a basis point.
• Tracks the MSCI USA IMI Real Estate Index tightly, with very little drift from the benchmark it promises to follow.
• Plain vanilla plumbing: a 1940 Act index fund holding about 150 US real estate stocks. No leverage, no options overlay, cash paid out quarterly.
• Trading since 2015 and now a multi-billion-dollar fund with Fidelity's index desk behind it.

Worth knowing

• DFAR Cheaper doors into the same room exist: SCHH and USRT run at 0.08%, VNQ at 0.13%.
• One country, one sector. Real estate moves with interest rates and property cycles, so the ride is bumpier than a broad market fund.
• Launched in 2022, so the record is short next to peers that have lived through more than one property cycle.

• FREL One sector, one country. US real estate can move on its own schedule for long stretches, and this fund rides every bit of that.
• Moderately traded rather than a volume leader in the category, which can show up as wider bid-ask spreads.
• Crowded shelf. SCHH, VNQ, USRT and XLRE cover similar ground at similar prices, so the real difference is which index each one follows.

Full DFAR profile⁠

Full FREL profile⁠