Schwab U.S. REIT ETF (NYSEMKT:SCHH) provides low-cost, concentrated exposure to domestic real estate, while iShares Global REIT ETF (NYSEMKT:REET) offers a broader, international portfolio with a higher historical distribution yield.

Real estate investment trusts (REITs) allow investors to gain exposure to income-producing property without the burdens of direct management. While both funds share a sector focus, their geographic boundaries and fee structures create distinct paths for those seeking either pure domestic exposure or global diversification.

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Schwab fund is the more affordable option with an expense ratio of 0.07%, which is half the cost of the iShares fund. However, income-seeking investors may find the higher payout from the iShares fund more appealing.

Growth of $1,000 over 5 years (total return)

The Schwab U.S. REIT ETF focuses exclusively on the domestic market, holding 120 positions entirely within the real estate sector. Its largest positions include Welltower at 11.07%, Prologis at 8.81%, and Digital Realty Trust at 4.63%. It was launched in 2011. Schwab U.S. REIT ETF has paid $0.66 per share over the trailing 12 months, which on its recent ~$23.85 share price works out to a 2.8% yield.

The iShares Global REIT ETF provides a much wider net with 316 holdings across developed and emerging markets. Its portfolio is also 100% real estate, and its top holdings include Welltower at 9.14%, Prologis at 7.28%, and Equinix (NASDAQ:EQIX) at 5.63%. It was launched in 2014. iShares Global REIT ETF has paid $0.93 per share over the trailing 12 months, which on its recent ~$27.89 share price works out to a 3.4% yield.

For more guidance on ETF investing, check out the full guide at this link.

Investing in a real estate investment trust can be a great way to gain exposure to the real estate market without owning physical property and managing the maintenance, costs, and taxes that are associated with it. Investing in a real estate investment trust ETF means owning positions in hundreds of landlords, each with its own real estate portfolio, further spreading out your risk and potentially maximizing your returns. Indeed, both the Schwab U.S. REIT ETF and the iShares Global REIT ETF offer relatively attractive dividend payouts, at 2.8% and 3.4%, respectively.

In fact, if your goal is dividend income, REET's higher dividend yield may be reason enough to choose this fund over SCHH. On the other hand, SCHH has slightly outperformed REET on a total return basis over the last one and five years, and it has a lower expense ratio.

But it's also important to look at a fund's total overall holdings. Schwab's U.S.-focused REIT ETF holds 120 positions, and all of the companies it holds operate within the U.S. real estate sector. That means its holdings are likely to be relatively stable, but you may lose out on some of the upside of broader diversification.

iShares' Global REIT ETF shares many of the same top holdings with Schwab's fund, but it also has a much larger portfolio that includes international REITs from both developed and emerging markets. Sometimes, this market diversification can lead to larger upside as well as stability. For example, if the U.S. real estate market enters a prolonged downturn, this fund could benefit from holding real estate companies in other markets with different outlooks. On the other hand, holding international companies also means dealing with more complexity, including currency exchange issues, geopolitical uncertainties, and tariffs.

Your choice between these two REIT ETFs will likely come down to your risk tolerance and the positioning of your current portfolio. Both choices offer relatively low-cost ways to capture the guaranteed income generation of real estate investing, and over the longer term have delivered similar performances.

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Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equinix and Prologis. The Motley Fool recommends Digital Realty Trust. The Motley Fool has a disclosure policy.

REIT ETF Investing in 2026: Going Global With REET vs. SCHH's U.S. Focus was originally published by The Motley Fool