VEU vs VNQ
Vanguard FTSE All World Ex US ETF vs Vanguard Real Estate ETF
Quick Verdict
VEU has a lower expense ratio. VEU delivered stronger 1-year returns. VEU offers more diversification with 3,928 holdings.
Side-by-Side Comparison
| Metric | VEU | VNQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.13% | |
| AUM | $68.4B | $39.3B | |
| Dividend Yield | 2.55% | 3.49% | |
| Holdings | 3,928 | 144 | |
| YTD Return | +15.44% | +13.46% | |
| 1Y Return | +27.32% | +13.14% | |
| 3Y Return (annualized) | +21.13% | +11.55% | |
| 5Y Return (annualized) | +9.93% | +2.33% | |
| Volatility (annualized) | 17.7% | 21.4% | |
| Max Drawdown | -62.8% | -75.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 2, 2007 | Sep 23, 2004 |
VEU vs VNQ Performance
Vanguard FTSE All World Ex US ETF (VEU) is a ETF from Vanguard (US) and Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US). Over the past year VEU returned +27.32% while VNQ returned +13.14%. Year to date, VEU is up 15.44% versus a gain of 13.46% for VNQ.
Over three years, VEU compounded at +21.13% per year against +11.55% for VNQ; over five years the annualized figures are +9.93% and +2.33% respectively. Across the full 20-year window we track, VNQ has the edge at +4.13% annualized vs +3.59%. 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 17.7% for VEU. 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 -62.8% for VEU 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 0.71. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VEU charges 0.04% per year while VNQ charges 0.13%. On a $10,000 position that is $4 vs $13 annually, a gap of $9 per year that compounds over a long holding period. On income, VEU currently yields 2.55% against 3.49% for VNQ.
Holdings Overlap
VEU and VNQ share 1 holdings out of 2964 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VEU | Weight in VNQ | Difference |
|---|---|---|---|
| IRM | 0.05% | 1.99% | 1.94% |
Frequently Asked Questions
Which is cheaper, VEU or VNQ?
VEU has an expense ratio of 0.04% while VNQ charges 0.13%. VEU is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, VEU or VNQ?
Over the past year VEU returned +27.32% vs +13.14% for VNQ, so VEU leads on 1-year performance. Over the longest common window we track (20 years), VEU annualized +3.59% vs +4.13% for VNQ. Past performance does not guarantee future results.
Which is riskier, VEU or VNQ?
VNQ has been the more volatile fund at 21.4% annualized versus 17.7% for VEU. Worst drawdown: VEU -62.8% vs VNQ -75.8%.
Should I hold both VEU and VNQ?
VEU and VNQ have a monthly-return correlation of 0.71, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VEU and VNQ?
VEU and VNQ share 1 common holdings with a 0.1% weight overlap. Combined, they hold 2964 unique securities.
Which pays a higher dividend, VEU or VNQ?
VEU yields 2.55% while VNQ yields 3.49%, so VNQ currently pays the higher dividend yield.
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