VNQ vs VTBNX
Vanguard Real Estate ETF vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. VNQ delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VNQ | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.02% | |
| AUM | $39.3B | $207.3B | |
| Dividend Yield | 3.49% | 3.79% | |
| Holdings | 144 | 15,623 | |
| YTD Return | +14.15% | -2.70% | |
| 1Y Return | +12.32% | -1.68% | |
| 3Y Return (annualized) | +11.31% | +0.65% | |
| 5Y Return (annualized) | +2.54% | -3.55% | |
| Volatility (annualized) | 21.4% | 6.3% | |
| Max Drawdown | -75.8% | -21.5% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Fixed Income | |
| Inception | Sep 23, 2004 | Feb 17, 2009 |
VNQ vs VTBNX Performance
Vanguard Real Estate ETF (VNQ) is a 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 returned +12.32% while VTBNX returned -1.68%. Year to date, VNQ is up 14.15% versus a loss of 2.70% for VTBNX.
Over three years, VNQ compounded at +11.31% per year against +0.65% for VTBNX; over five years the annualized figures are +2.54% and -3.55% respectively. Across the full 5-year window we track, VNQ has the edge at +4.16% annualized vs -3.55%. 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 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 -75.8% for VNQ and -21.5% for VTBNX. 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
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 3.79% for VTBNX.
Holdings Overlap
VNQ and VTBNX share 1 holdings out of 12871 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VNQ | Weight in VTBNX | Difference |
|---|---|---|---|
| NNN | 0.47% | 0.00% | 0.47% |
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. On a $10,000 investment, that is $11 per year of difference.
Which performed better, VNQ or VTBNX?
Over the past year VNQ returned +12.32% vs -1.68% for VTBNX, so VNQ leads on 1-year performance. Over the longest common window we track (5 years), VNQ annualized +4.16% vs -3.55% for VTBNX. Past performance does not guarantee future results.
Which is riskier, VNQ or VTBNX?
VNQ has been the more volatile fund at 21.4% annualized versus 6.3% for VTBNX. Worst drawdown: VNQ -75.8% vs VTBNX -21.5%.
Should I hold both VNQ and VTBNX?
VNQ and VTBNX 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 VNQ and VTBNX?
VNQ and VTBNX share 1 common holdings with a 0.0% weight overlap. Combined, they hold 12871 unique securities.
Which pays a higher dividend, VNQ or VTBNX?
VNQ yields 3.49% while VTBNX yields 3.79%, so VTBNX currently pays the higher dividend yield.
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