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The Real Estate Select Sector SPDR Fund (XLRE) is an exchange-traded fund designed to track the performance of the U.S. equity real estate sector. The ETF follows the Real Estate Select Sector Index, is managed by State Street Global Advisors, and trades under the ticker XLRE on the NYSE Arca.
Classified as a sector-focused equity ETF, XLRE seeks to reflect, before fees and expenses, the performance of companies within the U.S. real estate sector. To achieve this objective, the fund adopts a passive management strategy, maintaining a portfolio that aims to replicate the composition and weighting of its reference index.
The Real Estate Select Sector Index is composed of real estate companies that are constituents of the S&P 500, including operating companies and publicly traded real estate investment trusts.
The index is weighted by float-adjusted market capitalization and undergoes periodic reviews with additions, removals, and rebalancing to maintain alignment with its methodology
Diversification and sector exposure
XLRE provides concentrated exposure to the U.S. real estate sector, covering multiple segments of the industry. Sector diversification includes areas such as:
Real estate investment trusts (REITs).
Property management and operating companies.
Commercial real estate properties.
Residential real estate properties.
Specialized real estate infrastructure.
Structure and costs
XLRE shares are traded on the secondary market, while share creation and redemption occur through authorized participants, a mechanism that helps keep the ETF’s market price close to its net asset value (NAV).
The fund charges a management fee, which is typical of passively managed sector ETFs, and does not apply a performance fee. XLRE distributes income periodically, primarily derived from dividends paid by the underlying holdings.
History and evolution of the ETF
The Real Estate Select Sector SPDR Fund was launched in 2015, during a period marked by changes in sector classification within the U.S. equity market.
Since its inception, XLRE has been used as a vehicle for targeted exposure to the real estate sector, maintaining consistency in its passive investment strategy.
In recent years, XLRE has reflected the real estate sector’s sensitivity to interest rate changes and credit conditions. Higher rates affected REIT valuations, while macroeconomic developments and structural shifts in commercial and residential real estate influenced overall sector performance.
