A real estate ETF is an exchange traded fund (ETF) that primarily invests in real estate, either physically or by means of financial securities in which a basket of real estate investments is an underlying. Real estate funds typically invest in REITs and stocks that relate to real estate investments/ assets.
On the other hand, a REIT ETF is an ETF that that primarily invests in real estate investment trust (REIT) equity securities. In other words, REIT ETFs purchase and hold stocks issued by REITs, being a form of companies that invest in real property such as office buildings, hotels, housing projects, etc. In so doing, these funds aim to imitate the performance of REIT indexes.
In short, real estate ETFs can invest in a wider range of underlying real-estate related securities, while REIT ETFs primarily invest in equity securities issued by REITs. In other words, the former is general, where investment involves different types of securities that provide exposure to real estate, while the latter is specific and limited to one type of securities, REITs, as the name implies.
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