The Schwab U.S. REIT ETF (SCHH) is one of the simplest ways for investors to gain exposure to the U.S. real estate sector. With billions in assets under management and rock-bottom fees, SCHH offers broad diversification across equity real estate investment trusts (REITs) while maintaining the low-cost ethos that has made Schwab ETFs popular among both retail and institutional investors.
| Rank | Ticker | Company | % of Fund |
|---|---|---|---|
| 1 | WELL | Welltower Inc. | 8.41% |
| 2 | PLD | Prologis, Inc. | 7.74% |
| 3 | AMT | American Tower Corp. | 6.38% |
| 4 | EQIX | Equinix, Inc. | 4.66% |
| 5 | SPG | Simon Property Group, Inc. | 4.46% |
| 6 | DLR | Digital Realty Trust, Inc. | 4.14% |
| 7 | O | Realty Income Corp. | 4.04% |
| 8 | PSA | Public Storage | 3.31% |
| 9 | CCI | Crown Castle Inc. | 3.05% |
| 10 | VICI | VICI Properties Inc. | 2.53% |
| 11 | VTR | Ventas, Inc. | 2.31% |
| 12 | IRM | Iron Mountain Inc. | 2.28% |
| 13 | EXR | Extra Space Storage Inc. | 2.18% |
| 14 | AVB | AvalonBay Communities, Inc. | 2.05% |
| 15 | EQR | Equity Residential | 1.69% |
| 16 | SBAC | SBA Communications | 1.58% |
| 17 | WY | Weyerhaeuser Co. | 1.31% |
| 18 | ESS | Essex Property Trust, Inc. | 1.28% |
| 19 | INVH | Invitation Homes Inc. | 1.24% |
| 20 | MAA | Mid-America Apartment Communities | 1.23% |
| 21 | SUI | Sun Communities, Inc. | 1.13% |
| 22 | WPC | W. P. Carey Inc. | 1.10% |
| 23 | KIM | Kimco Realty Corp. | 1.10% |
| 24 | ARE | Alexandria Real Estate Equities | 1.00% |
| 25 | DOC | Healthpeak Properties, Inc. | 0.97% |
Investors use SCHH as a convenient building block to capture income and inflation protection. REITs are required to pay out at least 90% of taxable income as dividends, meaning SCHH typically offers a higher yield than the S&P 500. At the same time, its diversified exposure, spanning healthcare, industrial, retail, residential, and storage REITs, helps spread risk across multiple real estate verticals.
Like other sector ETFs, SCHH’s performance is driven by a handful of large holdings. The top three, Welltower, Prologis, and American Tower, account for more than 22% of the fund. Together, they represent three different corners of real estate: healthcare facilities, logistics warehouses, and communications towers.
1. Welltower Inc. (WELL)
Welltower is the largest healthcare REIT in the U.S., with a portfolio focused on senior housing, assisted living, and medical office buildings. Its scale and specialization in healthcare real estate give it a strong competitive advantage in an aging demographic environment. As the U.S. population continues to age, demand for Welltower’s properties is expected to increase, resulting in steady cash flows tied to long-term demographic trends.
The company has been proactive in repositioning its portfolio, shedding underperforming assets while investing in modern facilities that meet the evolving needs of healthcare providers. Partnerships with leading operators have helped maintain occupancy rates and drive rent growth, even during challenging economic cycles.
For SCHH, Welltower is a cornerstone holding. At over 8% of the ETF, it provides investors with exposure to the relatively defensive healthcare real estate market, balancing cyclical sectors like retail and industrial. Its predictable cash flow makes it a stabilizing force within the fund.
2. Prologis, Inc. (PLD)
Prologis is the global leader in logistics real estate, owning and managing warehouses and distribution centers critical to global supply chains. Its properties serve tenants ranging from e-commerce giants like Amazon to traditional retailers adapting to online shopping demand.
The company’s competitive advantage lies in its unmatched scale and global footprint. Prologis owns prime locations near ports, airports, and urban centers, making it indispensable for tenants needing efficient last-mile delivery. Its ability to raise rents and maintain high occupancy rates has helped it weather inflation and rising interest rates better than many peers.
In SCHH, Prologis’ 7.7% weight reflects its dominance in the industrial REIT space. Its inclusion gives investors exposure to one of the most durable growth stories in real estate: the ongoing rise of e-commerce and the structural demand for modern logistics space.
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3. American Tower Corp. (AMT)
American Tower is one of the largest global REITs, specializing in wireless communications infrastructure. It owns tens of thousands of towers and data infrastructure sites worldwide, leasing space to carriers like Verizon, AT&T, and T-Mobile. As mobile data usage surges and 5G networks expand, demand for tower space continues to grow.
Unlike traditional REITs tied to physical occupancy, American Tower’s value proposition lies in its long-term lease contracts, which include built-in escalators. This creates steady, inflation-protected cash flows. Its global diversification across the Americas, Africa, and Asia adds resilience by tapping into growth in emerging mobile markets.
As SCHH’s third-largest holding at over 6%, American Tower provides exposure to a REIT subsector that behaves more like infrastructure than traditional real estate. Its unique growth profile makes it an important complement to healthcare and industrial leaders within the ETF.
How Healthcare, Warehouses, and Towers Drive U.S. REIT Performance
SCHH’s top holdings highlight the diversity of the U.S. REIT market. Healthcare (Welltower), industrial logistics (Prologis), and communications infrastructure (American Tower) together make up more than one-fifth of the ETF. This balance provides both defensiveness and growth potential, allowing SCHH to serve as a core income-producing asset in diversified portfolios.
While smaller REITs round out the fund with exposure to residential, retail, storage, and office markets, it is the top-tier REITs that do the bulk of the work. SCHH’s concentration in sector leaders ensures stability, but it also means that performance often follows the fortunes of its largest names.
Key Insights
- Diversified exposure: Covers healthcare, industrial, retail, residential, and storage REITs in one ETF.
- Income focus: Required high payout ratios make REITs a reliable dividend play.
- Top-heavy leadership: Welltower, Prologis, and American Tower anchor the fund’s performance.
- Interest rate sensitivity: SCHH tends to outperform when rates stabilize or decline.
Why SCHH Is Right For REIT Investment
The Schwab U.S. REIT ETF (SCHH) is a straightforward, low-cost way to capture the income and diversification benefits of U.S. commercial real estate. By focusing on equity REITs, it delivers consistent dividends and exposure to structural growth areas like healthcare, logistics, and digital infrastructure.
The trade-off, as with any REIT fund, is sensitivity to interest rates. Rising rates can pressure valuations and funding costs, while falling rates tend to boost REIT performance. SCHH investors must be comfortable with this dynamic, but its broad diversification helps smooth volatility over time.
For long-term portfolios, SCHH offers a reliable way to access real estate’s income stream while diversifying beyond traditional stocks and bonds. Its top holdings are leaders in their respective niches, giving the fund durability and relevance in shifting market cycles.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
