With upcoming changes to Capital Gains Tax (CGT), direct ownership of residential property investment has become less attractive for existing properties. Listed property’s light shines a little brighter with ease of access, lack of large capital outlay and minimal administrative burden to get access to property as an asset class.
Property ETFs allow investors to gain exposure to a portfolio of listed property companies and trusts, often across dozens or even hundreds of properties. They can also provide access to areas of the property market that would be difficult for an individual investor to own directly, from shopping centres and office buildings to logistics facilities and data centres.
Not all property ETFs are created equal. The sector, geographic exposure, fees, portfolio construction and quality of the underlying businesses can vary significantly. These ETFs invest in listed securities so their prices can move quite differently from the values investors see in the direct property market.
Below, we explore our best-in-class property ETFs awarded a Gold Medalist rating by Morningstar’s Manager Research team. This is a forward-looking assessment that provides an assessment of which funds and ETFs are most likely to outperform their category benchmarks over a full market cycle.
Source: Morningstar Direct. Data as of 31st August 2026.
SS SPDR S&P/ASX 200 Listed Property ETF SLF
SPDR S&P/ASX 200 Listed Property SLF is a good option for exposure to Australian REITs. However, investors should note that narrowness in the market leads to a top-heavy portfolio.
The strategy aims to fully replicate the S&P/ASX 200 A-REIT Index, a benchmark consisting of around 20 predominantly large-cap Australia-listed property names as of Sept. 30, 2025. The Australian REIT market is concentrated, with the top 10 holdings in the index accounting for about 89% of the portfolio. The index concentration has become increasingly skewed owing to the remarkable performance of Goodman Group’s stock over the past five years. The stock now constitutes approximately 38% of the portfolio.
Given the limited opportunity set and challenges in generating alpha net of fees, passive strategies remain our preferred approach in this Morningstar Category. Most active managers stay close to the index weightings, with only a few taking significant active positions. This makes low-cost index funds more attractive in such concentrated markets. However, it should be noted that passive funds do not have the potential downside protection that a well-managed active manager can offer. The index is not prone to frequent changes; turnover is in the low single digits, keeping transaction costs minimal. However, the lumpy nature of the portfolio’s composition may lead to churn because of corporate actions or other changes resulting in index reconstitution. State Street has a lengthy history of seamless execution and maintains a consistently low tracking error for the strategy.
This fund offers a well-constructed, representative portfolio at a low cost, which is supported by State Street’s proven track record as an index tracker.
Vanguard Australian Properties Securities ETF VAP
A fine option for representative market exposure to Australian REITs.
Vanguard Australian Properties Securities ETF VAP is a great vehicle to gain broad market passive exposure to the domestic listed property sector.
The strategy tracks the S&P/ASX 300 A-REIT Index, reflecting the narrow Australian REIT market with around 50 listings on the Australian Securities Exchange as of December 2025. Given the limited opportunity set, few active strategies can differentiate themselves and outperform the benchmark, thereby making the appeal of passive strategies strong in this market segment. Of the listed A-REIT universe, the index consists of 30 constituents, with a market-cap coverage of over 95% as of December 2025.
The index provides a reasonable subsector diversification, but it does carry a high degree of stock-level concentration. As of December 2025, the top 10 holdings accounted for more than 80% of the portfolio assets. Given the portfolio concentration, a corporate action or firm exiting the underlying index could cause notable portfolio shifts. The strategy’s passive nature does not explicitly offer any downside protection in such events. That said, even active strategies are unable to offset the concentration risk meaningfully as they do not stray far from the index, leading to narrow levels of return dispersion within the Morningstar Category. This further boosts the appeal of passive strategies. The strategy’s scale aids trading efficiencies and smooth cash flow management, and the low management fee is appealing.
The strategy continues to earn our conviction based on the merits of the index with Vanguard’s legacy and scale.
Key differences between VAP and SLF
- Size: Vanguard has a large presence in the space. VAP is significantly larger at ~$2.84B compared to SLF’s ~$441M.
- Yield: One of property’s main attractions for investors is yield. SLF offers a noticeably higher 12-month yield (5.16% vs. 3.13%), which may appeal to income-focused investors.
- Risk: Both funds carry virtually identical risk profiles with standard deviation, beta, and Sharpe ratio all nearly equivalent.
Overall, these two funds are very closely matched in performance and risk. The primary differentiators are VAP’s larger scale and broader portfolio versus SLF’s longer history and higher income yield.