Since publishing an introduction to real estate ETF’s in February, we’ve received many questions regarding the differences between each of these ETF’s and while it would take a lot of time to go into each of these ETF’s in depth, we decided to publish a report describing the main REIT ETF’s that should be considered when building a long term portfolio. You read it well, these picks are for long term investing. I did include the leveraged ETF’s in the table at the bottom of this post because they can be viable short term options but even then. I can understand investing short term on commodities which move according to very well defined criteria’s such as inventories, supply, demand, etc. But Real Estate is much more of a macro-economic, long term investment, especially when made at a broad level like all ETF’s that are currently available.

Maybe at some point some more specialized real estate ETF’s will be available such as New York Real Estate. I could imagine such an ETF moving quite a bit more when certain events take place. But how much do real estate prices move during a period of a few days? I would say not very much.

Real estate prices have been very very volatile and have suffered quite a collapse in recent months/years. You can get some reliable data of the valuations of real estate in the US on the Standard & Poors website here. Just take a look at this chart of the Schiller Price Index which tracks real estate prices in the major US cities:

So without further wait, here are the top REIT ETF’s by category:

REIT ETF: Top Return in the past year: IFNA 83.97%

IFNA is an ETF that tracks the FTSE EPRA/NAREIT North America Index

REIT ETF: Top Return in 2010: REZ +16,40%

REZ is an ETF that tracks the FTSE NAREIT residential index, an index that includes REIT stocks on US exchanges. You can read more about the index here.

REIT ETF: Lowest Fees & Most Assets under management: VNQ 0.12

VNQ’s goal is to closely track the return of the MSCI® US REIT Index, a gauge of real estate stocks.