Vanguard Real Estate ETF (NYSEMKT:VNQ) offers a lower-cost entry into the domestic property market, while State Street SPDR Dow Jones REIT ETF (NYSEMKT:RWR) provides a more concentrated portfolio with stronger recent returns.
Investors seeking exposure to Real Estate Investment Trusts (REITs) often weigh these two heavyweight funds for their consistent income potential and exposure to hard assets. While both aim for total return through property-focused equities, the differing expense structures and portfolio depths of these funds may appeal to different types of yield-seeking investors looking to diversify a portfolio beyond traditional stocks and bonds without owning physical properties.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Vanguard Real Estate ETF is the more affordable option, with an expense ratio nearly half that of its State Street peer. Over long periods, this lower cost may preserve more capital for investors, especially as both funds offer comparable trailing-12-month dividend yields and similar risk-volatility profiles.
Performance & risk comparison
What’s inside
Vanguard Real Estate ETF allocates 99% of its portfolio to real estate. Its largest positions include Welltower (NYSE:WELL) at 9.80%, Prologis (NYSE:PLD) at 7.82%, and Equinix (NASDAQ:EQIX) at 6.37%. It holds 158 total positions and was launched in 2004. Vanguard Real Estate ETF has paid $3.47 per share over the trailing 12 months, which on its recent ~$99 share price works out to a 3.5% yield.
State Street SPDR Dow Jones REIT ETF similarly allocates 99% of its portfolio to real estate. Its largest positions include Welltower at 10%, Prologis at 9.91%, and Equinix at 4.58%. It holds 97 total positions and was launched in 2001. State Street SPDR Dow Jones REIT ETF has paid $3.78 per share over the trailing 12 months, which on its recent ~$114 share price works out to a 3.4% yield.
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