KBWY vs XLRE

KBWYBInvesco KBW Premium Yield Equity REIT ETF

XLREAState Street Real Estate Select Sector SPDR ETF

In short

KBWY Most real estate ETFs own the sector by size. KBWY goes yield hunting instead: a tight basket of roughly 30 equity REITs picked for premium payouts, with cash out the door monthly.

XLRE The S&P 500's landlords in one ticker: about 30 large-cap real estate companies, mortgage REITs excluded, for 0.08% a year. It launched in 2015, before real estate was even its own market sector.

Stated mandate

KBWY The fund seeks to track, before fees and expenses, the performance of the MSCI US REIT Index.

XLRE The fund seeks to provide investment results that generally correspond to the price and yield performance of the Real Estate Select Sector Index, representing the real estate sector of the S&P 500 Index.

Why people hold it

• KBWY A yield-first slice of the REIT market rather than a cap-weighted mirror of it: around 30 equity REITs screened for premium payouts, distributing monthly.
• At 0.35% a year, the fee sits a shade under the typical US real estate ETF, which is unusual for a screened, non-vanilla strategy.
• Live since 2010 and a close reader of its own rulebook: it stays tightly aligned with its stated yield mandate, and lands in the upper half of its real estate peer group.

• XLRE 0.08% a year sits at the floor of the real estate peer group, where the median fund charges several times more.
• Clean mandate: S&P 500 real estate management, development and equity REITs, with mortgage REITs left out, so no mortgage paper rides along in a property fund.ssga.com
• A multi-billion-dollar fund and one of the most actively traded names in its category, which usually shows up as tight spreads when you click buy.
• Running since 2015, arriving before S&P and MSCI split real estate out as its own sector in 2016. Pays quarterly, and ranks among the stronger builds in a crowded lineup.reit.com

Worth knowing

• KBWY Roughly 30 holdings, so one landlord's bad quarter shows up here far louder than in broad REIT funds holding hundreds of names.
• Plain cap-weighted REIT trackers cost far less: SCHH at 0.07% and VNQ at 0.13% versus 0.35% here. You are paying for the yield screen.
• Moderately traded rather than a category heavyweight, so spreads can run wider than the largest real estate ETFs, especially in fast markets.

• XLRE About 30 holdings, so the largest positions carry real weight and one company's stumble is felt across the fund.
• The S&P 500 sets the universe, so REITs that never reach large-cap index status stay outside the portfolio.ssga.comsec.gov
• This is one slice of the market, moving with the property cycle rather than blending into a broad index.

Full KBWY profile⁠

Full XLRE profile⁠