IYR has a 12.2% weight to residential REITs while VNQ’s residential exposure is 15.7%. The iShares Residential Real Estate Capped ETF (NYSEArca: REZ), which has a trailing 12-month yield of 3.29%, is a pure play on the residential REIT theme.

While some individual apartment REITs, including some held by the aforementioned ETFs, could benefit as more young workers become more upwardly mobile, there are still risks to REIT funds with residential exposure.

Namely, periods of economic strength are often associated with periods of rising rates. That may be a boon for some apartment REITs, but it may not be beneficial to REIT ETFs with heavy residential exposure because some would-be home buyers could be priced out of the market due to higher mortgage rates.

REZ has plunged almost 9% in the past, a nearly perfect inverse move with 10-year yields. When 10-year yields spiked more than 100 basis points from May 1 to Aug. 1, REZ lost 7.6%.

iShares Residential Real Estate Capped ETF