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nvesting in real estate ETFs offers a stable return potential, making them attractive for income-focused investors. Real Estate ETFs allow investors to engage with the sector without dealing with complexities and diversify their portfolio. They can also help protect against inflation as property values and rental income typically rise during inflationary periods.

    Real estate has historically delivered exceptional returns, with REITs emerging as an ideal investment option. REITs enable investors to participate in the real estate market without holding or managing properties, appealing to various investors seeking current income. The global REIT market size is expected to grow at a CAGR of 2.9% until 2028.

    The North American REIT industry is projected to exhibit a 2.5% CAGR until 2029. Given these encouraging trends, let's examine the fundamentals of top real estate ETFs. The iShares U.S. Real Estate ETF (IYR) seeks to track an index composed of U.S. equities in the real estate sector, investing in stocks of all capitalization and capturing a broad segment of the real estate space.

    The fund has assets under management of $4.72 billion, with top holdings including Prologis, Inc., American Tower Corporation, and Equinix, Inc. IYR's expense ratio is 0.39%, lower than the category average. The ETF pays an annual dividend of $2.36, translating to a 2.34% yield at the current price level.

    The Schwab U.S. REIT ETF (SCHH) invests in stocks of companies operating across the real estate and REIT sectors, tracking the performance of the Dow Jones U.S. Select REIT Index. With $8.01 billion in AUM, SCHH's top holdings are Prologis, Inc., American Tower Corporation, and Equinix, Inc.

    The Vanguard Real Estate Index Fund ETF Shares (VNQ) primarily invests in and offers broad exposure to U.S. equity REITs, along with a small diversification in specialized REITs and real estate firms. The fund tracks the performance of the MSCI US Investable Market Real Estate 25/50 Index.

    All three ETFs have strong fundamentals reflected in their POWR Ratings, with an overall rating of A translating to a Strong Buy in our proprietary rating system. They also have an A grade for Trade and Buy & Hold, making them top picks among real estate ETFs.