VCSH vs VNQ
Vanguard Short Term Corporate Bond ETF vs Vanguard Real Estate ETF
Quick Verdict
VCSH has a lower expense ratio. VNQ delivered stronger 1-year returns. VCSH offers more diversification with 3,023 holdings.
Side-by-Side Comparison
| Metric | VCSH | VNQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.13% | |
| AUM | $52.0B | $39.3B | |
| Dividend Yield | 4.46% | 3.49% | |
| Holdings | 3,023 | 144 | |
| YTD Return | +1.10% | +13.46% | |
| 1Y Return | +3.32% | +13.14% | |
| 3Y Return (annualized) | +5.75% | +11.55% | |
| 5Y Return (annualized) | +2.38% | +2.33% | |
| Volatility (annualized) | 2.6% | 21.4% | |
| Max Drawdown | -12.9% | -75.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Sep 23, 2004 |
VCSH vs VNQ Performance
Vanguard Short Term Corporate Bond ETF (VCSH) is a ETF from Vanguard (US) and Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US). Over the past year VCSH returned +3.32% while VNQ returned +13.14%. Year to date, VCSH is up 1.10% versus a gain of 13.46% for VNQ.
Over three years, VCSH compounded at +5.75% per year against +11.55% for VNQ; over five years the annualized figures are +2.38% and +2.33% respectively. Across the full 17-year window we track, VNQ has the edge at +4.13% annualized vs +1.30%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VNQ has been the more volatile fund, with annualized monthly volatility of 21.4% compared with 2.6% for VCSH. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -12.9% for VCSH and -75.8% for VNQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VCSH charges 0.03% per year while VNQ charges 0.13%. On a $10,000 position that is $3 vs $13 annually, a gap of $10 per year that compounds over a long holding period. On income, VCSH currently yields 4.46% against 3.49% for VNQ.
Holdings Overlap
VCSH and VNQ share 0 holdings out of 701 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VCSH or VNQ?
VCSH has an expense ratio of 0.03% while VNQ charges 0.13%. VCSH is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, VCSH or VNQ?
Over the past year VCSH returned +3.32% vs +13.14% for VNQ, so VNQ leads on 1-year performance. Over the longest common window we track (17 years), VCSH annualized +1.30% vs +4.13% for VNQ. Past performance does not guarantee future results.
Which is riskier, VCSH or VNQ?
VNQ has been the more volatile fund at 21.4% annualized versus 2.6% for VCSH. Worst drawdown: VCSH -12.9% vs VNQ -75.8%.
Should I hold both VCSH and VNQ?
VCSH and VNQ have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VCSH and VNQ?
VCSH and VNQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 701 unique securities.
Which pays a higher dividend, VCSH or VNQ?
VCSH yields 4.46% while VNQ yields 3.49%, so VCSH currently pays the higher dividend yield.
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