How to Invest in Real Estate ETFs

How can you use exchange-traded funds (ETFs) to invest in the real estate sector? This moneyland.ch guide answers the most important questions.

Why is real estate an interesting investment?

Real estate has long had a reputation for being a secure investment. In many countries, owning a home is not just an emotional goal to save towards, but also a tried and proven way to protect your wealth.

The prices of houses and apartments in many developed countries have continually reached new heights in past years. It is hardly surprising then that many investors want to participate in these profits.

What are real estate ETFs?

Buying real estate directly is not a realistic option for the majority of investors – largely because of the exorbitant amounts of capital required. Additionally, concentrating so much money in just one or even several properties is like placing all your eggs in one basket.

ETFs that invest in the real estate sector are a more accessible, more liquid, and more diversified vehicle for investing in real estate. They enable you to invest even small amounts of capital into the real estate sector.

These ETFs normally replicate stock indexes that either fully or primarily track the performance of real estate investment trusts (REITs). A REIT is a real estate company that meets certain legal requirements. One common requirement is that a certain portion of profits is distributed to investors as dividends. Additionally, real estate activities such as renting, leasing, or buying and selling property must be the company’s core business. Currently, Switzerland does not have a REIT company type. But many real estate stock indexes that specialize in REITs also include Swiss stocks. Swiss Prime Site and PSP Swiss property are two examples of Swiss real estate companies.

In contrast to actively-managed real estate funds, real estate ETFs have relatively low ongoing fees (shown as the total expense ratio or TER). Another difference is that there is not normally a minimum capital requirement for investing in ETFs. But it is important to be aware that there are also actively-managed ETFs that invest in real estate. 

Which indexes track real estate stocks?

There are a number of globally-diversified stock indexes that focus on REITs:

• Dow Jones Global Select Real Estate Securities Index: This index published by US financial services provider Dow Jones & Company tracks more than 200 real estate companies in 22 developed and developing countries.
• FTSE EPRA Nareit Developed Index: This index published by the European Public Real Estate Association (EPRA) and British financial services provider FTSE tracks more than 300 stocks from 22 developed countries. A number of sub-indexes are also published. These include the FTSE EPRA Nareit Developed Dividend+ Index, which is focused on dividends, and the FTSE EPRA Nareit Developed Green Index, which has a stronger emphasis on sustainability criteria.
• GPR Global 100 Index: According to its factsheet, this index, which includes exactly 100 stocks, is meant to provide a representative picture of the global market for real estate stocks. The index is published by Global Property Research, a service provider headquartered in Amsterdam. 

There are also stock indexes that track only European or Swiss real estate stocks. You can find information about Swiss indexes in the moneyland.ch guide to investing in Swiss real estate.

Which real estate ETFs are available to Swiss investors?

Investors in Switzerland can use a number of different real estate ETFs to invest in the real estate stock market indexes listed above. 

Shares in ETFs are traded on stock exchanges, just like those of companies. In order to invest in an ETF, you need to have an account with a stockbroker. You can compare stock brokers using the interactive online trading comparison on moneyland.ch.

Alternatively, you can also invest in ETFs using the neobanks Neon and Yuh. However, both of these neobanks offer only a limited selection of ETFs. As per March 2025, Yuh does not offer any of the ETFs listed in the table above. Neon offers just one – the SPDR Dow Jones Global Real Estate UCITS ETF.

Which risks and disadvantages should I be aware of?

Before you invest in real estate ETFs, it is important to understand that your money is not invested directly in real properties. Instead, your capital is invested in companies which, in turn, earn money using houses and apartments. So real estate ETFs can only be used for indirect investments in real estate markets. Because real estate ETFs invest in companies, they are more closely correlated to the stock market as a whole – compared to investing directly in properties outside of the stock market (using real estate crowdfunding, for example).

Investing in securities like ETFs comes with a risk of loss. Although investing in a diversified ETF generally reduces the risk compared to betting on individual stocks, both short-term and long-term losses are always a possibility. You should also note that when you invest in a real estate ETF, you are investing in just one sector. As a general rule, your investments should be diversified across many different industry sectors. For that reason, real estate ETFs should only be used as a component with which to further diversify your stock portfolio. 

How profitable are real estate ETFs?

There is no way to predict how well or how poorly real estate ETFs may perform in the future. If you want to get an idea of how a market may perform, your only option is to look at past performance. A historical performance comparison between real estate ETFs and an ETF that tracks the FTSE All-World global stock index offers interesting insights. It shows that the real estate ETFs underperformed the global stock ETF over both five-year and 10-year terms.

Note: This article is provided for informational purposes only, and should not be considered investment advice. The publisher does not accept any liability in connection with this publication.

More on this topic:
Compare Swiss stockbrokers now
How to invest in Swiss real estate
Real estate crowdfunding in Switzerland explained
How to invest money in Switzerland