VNQ vs VUG
Vanguard Real Estate ETF vs Vanguard Morningstar Growth ETF
Quick Verdict
VUG has a lower expense ratio. VUG delivered stronger 1-year returns. VUG offers more diversification with 146 holdings.
Side-by-Side Comparison
| Metric | VNQ | VUG | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.03% | |
| AUM | $39.3B | $219.5B | |
| Dividend Yield | 3.49% | 0.40% | |
| Holdings | 144 | 146 | |
| YTD Return | +13.57% | +7.81% | |
| 1Y Return | +12.92% | +15.94% | |
| 3Y Return (annualized) | +11.70% | +24.03% | |
| 5Y Return (annualized) | +2.31% | +12.48% | |
| Volatility (annualized) | 21.4% | 16.5% | |
| Max Drawdown | -75.8% | -51.4% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Sep 23, 2004 | Jan 26, 2004 |
VNQ vs VUG Performance
Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US) and Vanguard Morningstar Growth ETF (VUG) is a ETF from Vanguard (US). Over the past year VNQ returned +12.92% while VUG returned +15.94%. Year to date, VNQ is up 13.57% versus a gain of 7.81% for VUG.
Over three years, VNQ compounded at +11.70% per year against +24.03% for VUG; over five years the annualized figures are +2.31% and +12.48% respectively. Across the full 22-year window we track, VUG has the edge at +11.16% annualized vs +4.14%. 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 16.5% for VUG. 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 -51.4% for VUG. 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VNQ charges 0.13% per year while VUG 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 0.40% for VUG.
Holdings Overlap
VNQ and VUG share 5 holdings out of 285 unique holdings combined, representing a 1.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VNQ or VUG?
VNQ has an expense ratio of 0.13% while VUG charges 0.03%. VUG is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, VNQ or VUG?
Over the past year VNQ returned +12.92% vs +15.94% for VUG, so VUG leads on 1-year performance. Over the longest common window we track (22 years), VNQ annualized +4.14% vs +11.16% for VUG. Past performance does not guarantee future results.
Which is riskier, VNQ or VUG?
VNQ has been the more volatile fund at 21.4% annualized versus 16.5% for VUG. Worst drawdown: VNQ -75.8% vs VUG -51.4%.
Should I hold both VNQ and VUG?
VNQ and VUG have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VNQ and VUG?
VNQ and VUG share 5 common holdings with a 1.0% weight overlap. Combined, they hold 285 unique securities.
Which pays a higher dividend, VNQ or VUG?
VNQ yields 3.49% while VUG yields 0.40%, so VNQ currently pays the higher dividend yield.
Popular ETF Comparisons
Get Full ETF Analytics
Access complete holdings data, overlap analysis, screener tools, and more with FundXLS.