Which Real Estate ETF Is the Better Buy: iShares’ Concentrated ICF or Northern Trust’s Global GQRE?
ICF has delivered stronger returns by concentrating in 30 dominant U.S. REITs, while GQRE takes a global approach and pays nearly twice the dividend yield.
iShares Select U.S. REIT ETF (ICF) and Northern Trust Global Quality Real Estate ETF (GQRE) are both real estate investment trusts (REITs) that provide investors with income and inflation protection, but they differ in their approach. ICF focuses on a concentrated portfolio of 30 U.S. real estate companies, while GQRE offers broader global diversification with exposure to 201 quality real estate firms worldwide.
ICF has a lower expense ratio of 0.32% compared to GQRE's 0.46%, making it more affordable for long-term investors. However, GQRE provides a higher dividend yield of 4.5% compared to ICF's 2.7%, which may be more appealing to investors seeking current income.
GQRE's higher yield is attributed to its quality-screened global portfolio that includes international real estate alongside U.S. names, providing a broader foundation than ICF's concentrated 30-stock domestic approach. GQRE's largest holdings include Prologis, Welltower, and Equinix, while ICF's top holdings are also Prologis, Welltower, and Equinix.
In the current environment of rising mortgage costs and Federal Reserve rate hikes, income has become crucial for many investors. With GQRE paying nearly twice the annual income of ICF, it presents an attractive option for those relying on their portfolio to generate cash. However, ICF's lower cost and concentration on the largest U.S. REITs may appeal to those who prioritize simplicity and domestic exposure. Ultimately, the choice between the two funds depends on an investor's specific goals and risk tolerance.
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