Which Real Estate ETF Is the Better Buy: State Street’s REIT Fund RWR or Global Fund RWO?
The U.S.-only fund carries half the expense ratio and posted stronger one-year returns, but its global peer spreads risk across international and emerging markets.
State Street offers two real estate ETFs: the REIT-focused RWR and the globally diversified RWO. The primary difference lies in their investment focus and fee structure. RWR charges a lower 0.25% expense ratio versus RWO's 0.50%, making it a more cost-effective choice for long-term investors. Both funds include major real estate investment trusts like Welltower and Prologis in their top holdings.
While RWO adds international real estate exposure, its largest holdings remain U.S.-based companies, with only a slight global tilt. Recent performance shows RWR outpacing RWO over the past year and five years, and it offers a slightly higher yield of 3.3% compared to RWO's 3.2%. For investors prioritizing cost and performance, RWR presents the better buy, especially in a rising interest rate environment where lower fees can make a significant difference in net returns.
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