VNQ vs VTCIX
Vanguard Real Estate ETF vs Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares
Quick Verdict
VTCIX has a lower expense ratio. VTCIX delivered stronger 1-year returns. VTCIX offers more diversification with 836 holdings.
Side-by-Side Comparison
| Metric | VNQ | VTCIX | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.03% | |
| AUM | $39.3B | $5.2B | |
| Dividend Yield | 3.49% | 0.93% | |
| Holdings | 144 | 836 | |
| YTD Return | +13.46% | +12.08% | |
| 1Y Return | +13.14% | +20.64% | |
| 3Y Return (annualized) | +11.55% | +20.37% | |
| 5Y Return (annualized) | +2.33% | +11.00% | |
| Volatility (annualized) | 21.4% | 16.1% | |
| Max Drawdown | -75.8% | -26.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Sep 23, 2004 | Feb 24, 1999 |
VNQ vs VTCIX Performance
Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US) and Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) is a mutual fund from Vanguard (US). Over the past year VNQ returned +13.14% while VTCIX returned +20.64%. Year to date, VNQ is up 13.46% versus a gain of 12.08% for VTCIX.
Over three years, VNQ compounded at +11.55% per year against +20.37% for VTCIX; over five years the annualized figures are +2.33% and +11.00% respectively. Across the full 5-year window we track, VTCIX has the edge at +11.00% annualized vs +4.13%. 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 16.1% for VTCIX. 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 -26.0% for VTCIX. 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VNQ charges 0.13% per year while VTCIX charges 0.03%. On a $10,000 position that is $13 vs $3 annually, a gap of $10 per year that compounds over a long holding period. On income, VNQ currently yields 3.49% against 0.93% for VTCIX.
Holdings Overlap
VNQ and VTCIX share 39 holdings out of 930 unique holdings combined, representing a 2.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VNQ or VTCIX?
VNQ has an expense ratio of 0.13% while VTCIX charges 0.03%. VTCIX is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, VNQ or VTCIX?
Over the past year VNQ returned +13.14% vs +20.64% for VTCIX, so VTCIX leads on 1-year performance. Over the longest common window we track (5 years), VNQ annualized +4.13% vs +11.00% for VTCIX. Past performance does not guarantee future results.
Which is riskier, VNQ or VTCIX?
VNQ has been the more volatile fund at 21.4% annualized versus 16.1% for VTCIX. Worst drawdown: VNQ -75.8% vs VTCIX -26.0%.
Should I hold both VNQ and VTCIX?
VNQ and VTCIX have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VNQ and VTCIX?
VNQ and VTCIX share 39 common holdings with a 2.1% weight overlap. Combined, they hold 930 unique securities.
Which pays a higher dividend, VNQ or VTCIX?
VNQ yields 3.49% while VTCIX yields 0.93%, so VNQ currently pays the higher dividend yield.
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