VNQ vs VTIP
Vanguard Real Estate ETF vs Vanguard Short-Term Inflation-Protected Securities ETF
Quick Verdict
VTIP has a lower expense ratio. VNQ delivered stronger 1-year returns. VNQ offers more diversification with 144 holdings.
Side-by-Side Comparison
| Metric | VNQ | VTIP | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.03% | |
| AUM | $38.2B | $19.3B | |
| Dividend Yield | 3.52% | 3.60% | |
| Holdings | 144 | 27 | |
| YTD Return | +13.55% | +1.95% | |
| 1Y Return | +14.03% | +2.91% | |
| 3Y Return (annualized) | +10.28% | +5.54% | |
| 5Y Return (annualized) | +2.27% | +3.36% | |
| Volatility (annualized) | 21.4% | 2.4% | |
| Max Drawdown | -75.8% | -7.1% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Fixed Income | |
| Inception | Sep 23, 2004 | Oct 12, 2012 |
VNQ vs VTIP Performance
Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US) and Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) is a ETF from Vanguard (US). Over the past year VNQ returned +14.03% while VTIP returned +2.91%. Year to date, VNQ is up 13.55% versus a gain of 1.95% for VTIP.
Over three years, VNQ compounded at +10.28% per year against +5.54% for VTIP; over five years the annualized figures are +2.27% and +3.36% respectively. Across the full 14-year window we track, VNQ has the edge at +4.14% annualized vs +1.58%. 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 2.4% for VTIP. 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 -7.1% for VTIP. 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 0.53. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VNQ charges 0.13% per year while VTIP 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 3.52% against 3.60% for VTIP.
Holdings Overlap
VNQ and VTIP share 0 holdings out of 167 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, VNQ or VTIP?
VNQ has an expense ratio of 0.13% while VTIP charges 0.03%. VTIP is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, VNQ or VTIP?
Over the past year VNQ returned +14.03% vs +2.91% for VTIP, so VNQ leads on 1-year performance. Over the longest common window we track (14 years), VNQ annualized +4.14% vs +1.58% for VTIP. Past performance does not guarantee future results.
Which is riskier, VNQ or VTIP?
VNQ has been the more volatile fund at 21.4% annualized versus 2.4% for VTIP. Worst drawdown: VNQ -75.8% vs VTIP -7.1%.
Should I hold both VNQ and VTIP?
VNQ and VTIP have a monthly-return correlation of 0.53, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VNQ and VTIP?
VNQ and VTIP share 0 common holdings with a 0.0% weight overlap. Combined, they hold 167 unique securities.
Which pays a higher dividend, VNQ or VTIP?
VNQ yields 3.52% while VTIP yields 3.60%, so VTIP currently pays the higher dividend yield.
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