REIT ETFs XLRE and VNQ offer stable 3-4% yields despite rising Treasury rates, with VNQ more diversified.

Real Estate ETFs XLRE and VNQ currently yield about 3-4%, which remains attractive even as 10-year Treasury yields hover around 4.4%. XLRE focuses on about 30 large-cap REITs, heavily weighted in specialized properties like data centers and cell towers, while VNQ holds over 150 REITs across various sectors, offering broader diversification. Both ETFs have maintained stable payouts despite rising interest rates, supported by strong cash flows from key holdings and demographic trends. The main risk is rate sensitivity affecting valuations and refinancing costs, but historical payout stability and modest fees suggest these distributions are sustainable for income-focused investors.