There are actually three exchange funds offering exposure to homebuilders and companies related to residential real estate, but two, the SPDR S&P Homebuilders ETF (NYSEArca: XHB) and the iShares U.S. Home Construction ETF (NYSEArca: ITB), attract most of the attention in this ETF genre.

While the $1.96 billion XHB and the $1.55 billion ITB both have “homebuilders” in their names, the pair stand as one of the more relevant case studies regarding why investors need to look beyond ETF labels. [Get to Know Your ETFs]

“Both have plenty of liquidity and reasonable expense ratios. Where they part is in their definition of ‘homebuilding.’ Is it erecting a structure that people will live in? Or is it erecting a structure and then furnishing it with couches, a fridge, bath towels, perhaps a hot tub?,” writes Eric Balchunas for Bloomberg.

Said differently, the investor that wants exposure to actual homebuilders, think Pulte Group (NYSE: PHM), Lennar (NYSE: LEN), and related fare, should opt for ITB. Eight of ITB’s top-10 holdings are pure play homebuilders.

On the other hand, XHB is an equal-weight ETF and while it does hold shares of homebuilders, it also mixes in derivatives plays like USG (NYSE: USG), Lumber Liquidators (NYSE: LL), Whirlpool (NYSE: WHR) and Pier One (NYSE: PIR).

XHB has an almost 37% combined weight to home furnishings, home furnishings retail and home improvement names. Those are generally considered consumer discretionary stocks and that has been a good sector to be involved with over the past year. It is that discretionary exposure that explains why XHB is up 13.5% over the past 12 months while ITB is higher by 6.3%. [Improving Sentiment Lifts Homebuilder ETFs]