VNQ vs VWO
Vanguard Real Estate ETF vs Vanguard FTSE Emerging Markets ETF
Quick Verdict
VWO has a lower expense ratio. VWO delivered stronger 1-year returns. VWO offers more diversification with 6,334 holdings.
Side-by-Side Comparison
| Metric | VNQ | VWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.06% | |
| AUM | $39.3B | $122.0B | |
| Dividend Yield | 3.49% | 2.39% | |
| Holdings | 144 | 6,334 | |
| YTD Return | +13.46% | +10.18% | |
| 1Y Return | +13.14% | +20.99% | |
| 3Y Return (annualized) | +11.55% | +18.45% | |
| 5Y Return (annualized) | +2.33% | +7.14% | |
| Volatility (annualized) | 21.4% | 20.1% | |
| Max Drawdown | -75.8% | -68.3% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Sep 23, 2004 | Mar 4, 2005 |
VNQ vs VWO Performance
Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US) and Vanguard FTSE Emerging Markets ETF (VWO) is a ETF from Vanguard (US). Over the past year VNQ returned +13.14% while VWO returned +20.99%. Year to date, VNQ is up 13.46% versus a gain of 10.18% for VWO.
Over three years, VNQ compounded at +11.55% per year against +18.45% for VWO; over five years the annualized figures are +2.33% and +7.14% respectively. Across the full 21-year window we track, VWO has the edge at +4.98% 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 20.1% for VWO. 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 -68.3% for VWO. 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VNQ charges 0.13% per year while VWO charges 0.06%. On a $10,000 position that is $13 vs $6 annually, a gap of $7 per year that compounds over a long holding period. On income, VNQ currently yields 3.49% against 2.39% for VWO.
Holdings Overlap
VNQ and VWO share 1 holdings out of 4127 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 VWO | Difference |
|---|---|---|---|
| EGP | 0.58% | 0.01% | 0.57% |
Frequently Asked Questions
Which is cheaper, VNQ or VWO?
VNQ has an expense ratio of 0.13% while VWO charges 0.06%. VWO is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, VNQ or VWO?
Over the past year VNQ returned +13.14% vs +20.99% for VWO, so VWO leads on 1-year performance. Over the longest common window we track (21 years), VNQ annualized +4.13% vs +4.98% for VWO. Past performance does not guarantee future results.
Which is riskier, VNQ or VWO?
VNQ has been the more volatile fund at 21.4% annualized versus 20.1% for VWO. Worst drawdown: VNQ -75.8% vs VWO -68.3%.
Should I hold both VNQ and VWO?
VNQ and VWO have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VNQ and VWO?
VNQ and VWO share 1 common holdings with a 0.0% weight overlap. Combined, they hold 4127 unique securities.
Which pays a higher dividend, VNQ or VWO?
VNQ yields 3.49% while VWO yields 2.39%, so VNQ currently pays the higher dividend yield.
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