VNQ vs VTBNX
Vanguard Real Estate ETF vs Vanguard Total Bond Market II Index Fund Institutional Shares
Which is better, VNQ or VTBNX?
Mid Cap Blend against Long Term High Quality.
VTBNX has a lower expense ratio.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | VNQ | VTBNX |
|---|---|---|
| Expense Ratio | 0.13% | 0.02%Best |
| AUM | $39.3B | $207.3B |
| Dividend Yield | 3.49% | 3.80% |
| Holdings | 144 | 14,920 |
| YTD Price Return | +6.56% | -3.95% |
| 1Y Price Return | +1.80% | -4.74% |
| 3Y Price Return (annualized) | +4.86% | +0.00% |
| 5Y Price Return (annualized) | -2.48% | -3.89% |
| Volatility (annualized) | 19.2% | 6.3%Best |
| Max Drawdown | -38.8% | -21.4%Best |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Equity | Fixed Income |
| Style | Mid Cap Blend | Long Term High Quality |
| Inception | Sep 23, 2004 | Feb 17, 2009 |
Not shown on this pair: $10,000 over 5 years, Top 10 Weight.
A price return is not the return of a fund that pays its income out. The coupon or distribution never appears in the price, so the return rows carry no winner here. VNQ currently yields 3.49% and VTBNX 3.80%.
Volatility and max drawdown are measured over the window both funds cover: Sep 15, 2021 to Sep 11, 2026 (5 years).
VNQ vs VTBNX Performance
Vanguard Real Estate ETF (VNQ) is an ETF from Vanguard (US) and Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US). Over the past year VNQ's price moved +1.80% and VTBNX's -4.74%, before the income each one paid out.
Over three years, VNQ compounded at +4.86% per year against +0.00% for VTBNX; over five years the annualized figures are -2.48% and -3.89% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VNQ has been the more volatile fund, with annualized monthly volatility of 19.2% compared with 6.3% for VTBNX. 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 -38.8% for VNQ and -21.4% for VTBNX. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VNQ charges 0.13% per year while VTBNX charges 0.02%. On a $10,000 position that is $13 vs $2 annually, a gap of $11 per year that compounds over a long holding period. On income, VNQ currently yields 3.49% against 3.80% for VTBNX.
Structure and taxes
VTBNX is a mutual fund and VNQ is an ETF. A mutual fund prices once a day at net asset value and may carry a purchase minimum. An ETF trades through the day at whatever the market pays for it.
In a taxable account the difference that usually matters is distributions. An ETF can meet redemptions in kind, so it rarely has to sell holdings and rarely passes a capital gain to the people who held it; a mutual fund that sells holdings to meet redemptions can distribute a realised gain at year end to everyone still in the fund, whether or not they sold anything themselves. In a tax-deferred account that difference largely disappears. Both are descriptions of how the two wrappers work, not a recommendation.
Tax-loss harvesting works on either wrapper.
Holdings Overlap
At least 0.6% of VNQ's money is in holdings VTBNX also owns.
Stated as a floor: for VTBNX, our book for it covers 61.9% of that fund, so a holding it does not list is one we cannot count as shared. The real figure is this or higher.
We cannot see either book well enough to say how much of this pair is duplicated.
1 positions in common, counted across the 139 positions we hold weights for in VNQ and 12,623 in VTBNX, against full books of 144 and 14,920.
What only one of them owns
Measured across the 139 and 12,623 positions we hold weights for.
VTBNX holds 2,347 positions VNQ does not, 61.9% of the fund.
Largest: T 3.5 01/31/28 0.38%, T 4.25 08/15/35 0.37%, T 4.25 05/15/35 0.37%, T 4.625 02/15/35 0.36%, T 4.375 05/15/34 0.35%
Top Shared Holdings
| Stock | Weight in VNQ | Weight in VTBNX | Difference |
|---|---|---|---|
| NNNNational Retail Properties Inc | 0.55% | 0.00% | 0.55% |
You are not choosing between two funds in isolation.
Whichever of VNQ and VTBNX you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, VNQ or VTBNX?
VNQ has an expense ratio of 0.13% while VTBNX charges 0.02%. VTBNX is the cheaper option, by $11 a year on a $10,000 investment.
Which is riskier, VNQ or VTBNX?
VNQ has been the more volatile fund at 19.2% annualized versus 6.3% for VTBNX. Worst drawdown: VNQ -38.8% vs VTBNX -21.4%.
Should I hold both VNQ and VTBNX?
VNQ and VTBNX have a monthly-return correlation of 0.70, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, VNQ or VTBNX?
VNQ yields 3.49% while VTBNX yields 3.80%, so VTBNX currently pays the higher dividend yield.
Is it better to hold VTBNX or VNQ in a taxable account?
VNQ is an ETF and VTBNX is a mutual fund. An ETF can meet redemptions in kind, so it rarely distributes a capital gain to the people holding it. A mutual fund that sells holdings to meet redemptions can pass a realised gain to every holder at year end. In a tax-deferred account that difference largely disappears. This is information, not a recommendation.
Is VTBNX better than VNQ?
VTBNX has a lower expense ratio. Which one suits a particular account depends on what it is for. This is information, not a recommendation.