The Real Estate Select Sector SPDR ETF (XLRE) is a passively managed ETF that tracks the real estate sector of the S&P 500 with a low expense ratio of 0.13%. The real estate sector was added to the S&P 500 in 2015 and has maintained a very small weight of just under 3% of the index since.
Within the real estate sector, the holdings are typically REITs (real estate investment trusts) which are companies that own and manage a large portfolio of real estate and pass on earnings from rentals or sales to shareholders. These REITs often charge very large expenses to shareholders to justify their active management – on average between 6% and 9% of revenue.
Investors who are seeking passive real estate investing are probably better off joining a private real estate syndication or purchasing their own properties and paying a similar fee to a property