VEA vs VNQ
Vanguard FTSE Developed Markets ETF vs Vanguard Real Estate ETF
Quick Verdict
VEA has a lower expense ratio. VEA delivered stronger 1-year returns. VEA offers more diversification with 3,918 holdings.
Side-by-Side Comparison
| Metric | VEA | VNQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.13% | |
| AUM | $230.9B | $38.2B | |
| Dividend Yield | 2.57% | 3.52% | |
| Holdings | 3,918 | 144 | |
| YTD Return | +17.17% | +13.55% | |
| 1Y Return | +28.88% | +14.03% | |
| 3Y Return (annualized) | +20.71% | +10.28% | |
| 5Y Return (annualized) | +10.20% | +2.27% | |
| Volatility (annualized) | 17.8% | 21.4% | |
| Max Drawdown | -62.9% | -75.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jul 20, 2007 | Sep 23, 2004 |
VEA vs VNQ Performance
Vanguard FTSE Developed Markets ETF (VEA) is a ETF from Vanguard (US) and Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US). Over the past year VEA returned +28.88% while VNQ returned +14.03%. Year to date, VEA is up 17.17% versus a gain of 13.55% for VNQ.
Over three years, VEA compounded at +20.71% per year against +10.28% for VNQ; over five years the annualized figures are +10.20% and +2.27% respectively. Across the full 19-year window we track, VNQ has the edge at +4.14% annualized vs +3.18%. 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 17.8% for VEA. 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 -62.9% for VEA 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 0.72. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VEA 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, VEA currently yields 2.57% against 3.52% for VNQ.
Holdings Overlap
VEA and VNQ share 0 holdings out of 3152 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, VEA or VNQ?
VEA has an expense ratio of 0.03% while VNQ charges 0.13%. VEA is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, VEA or VNQ?
Over the past year VEA returned +28.88% vs +14.03% for VNQ, so VEA leads on 1-year performance. Over the longest common window we track (19 years), VEA annualized +3.18% vs +4.14% for VNQ. Past performance does not guarantee future results.
Which is riskier, VEA or VNQ?
VNQ has been the more volatile fund at 21.4% annualized versus 17.8% for VEA. Worst drawdown: VEA -62.9% vs VNQ -75.8%.
Should I hold both VEA and VNQ?
VEA and VNQ have a monthly-return correlation of 0.72, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VEA and VNQ?
VEA and VNQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3152 unique securities.
Which pays a higher dividend, VEA or VNQ?
VEA yields 2.57% while VNQ yields 3.52%, so VNQ currently pays the higher dividend yield.
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