U.S. REIT Exposure or Global Real Estate Diversification? VNQ vs. RWX
Key Points
RWX charges a much higher expense ratio (0.59%) than VNQ (0.13%)
VNQ covers U.S. real estate almost exclusively, while RWX focuses on international real estate companies
RWX is much smaller and less liquid, which could matter for investors trading larger positions
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Vanguard Real Estate ETF (NYSEMKT:VNQ) keeps costs low with a 0.13% expense ratio while tracking U.S. REITs, whereas State Street SPDR Dow Jones International Real Estate ETF (NYSEMKT:RWX) charges a much higher 0.59% expense ratio and targets global real estate stocks outside the U.S.
VNQ and RWX both provide real estate exposure, but with different strategies. VNQ targets the U.S. market and is a leading fund, while RWX offers access to international real estate companies. This comparison reviews cost, performance, risk, portfolio composition, and trading characteristics to help determine which ETF best suits your needs.
Snapshot (cost & size)
| Metric | VNQ | RWX |
|---|---|---|
| Issuer | Vanguard | SPDR |
| Expense ratio | 0.13% | 0.59% |
| 1-yr return (as of 2026-03-16) | 1.3% | 13.4% |
| Dividend yield | 3.63% | 3.35% |
| Beta | 1.15 | 0.90 |
| AUM | $69.6 billion | $310.51 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
RWX is significantly more expensive to hold, with an expense ratio of 0.59% compared to VNQ’s 0.13%, though both funds offer nearly identical dividend yields near 3.6%–3.7%.
Performance & risk comparison
| Metric | VNQ | RWX |
|---|---|---|
| Max drawdown (5 y) | -34.48% | -35.92% |
| Growth of $1,000 over 5 years | $1,003 | $797 |
What's inside
RWX invests in real estate companies outside the U.S., tracking an international index with 121 holdings. Its largest positions include Mitsui Fudosan Co Ltd (8801.T) 7.06%, Swiss Prime Site Reg (SIX:SPSN.SW) 3.17%, and Scentre Group (ASX:SCG.AX) 2.91%. RWX has been around for over 19 years, but its assets under management remain modest.
VNQ, on the other hand, is heavily focused on U.S. real estate with 98% of assets in the sector. Its top holdings are Welltower Inc (NYSE:WELL) 8.81%, Prologis Inc (NYSE:PLD) 8.29%, and Equinix Inc (NASDAQ:EQIX) 5.99%. VNQ holds 158 stocks and is one of the largest real estate ETFs globally, with strong sector concentration and no significant quirks or non-standard features.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Publicly traded real estate is not a unified market. Property sectors, interest rates, and economic trends vary by region, which distinguishes the Vanguard Real Estate ETF from the SPDR Dow Jones International Real Estate ETF.
VNQ focuses on the U.S. REIT market, where results depend mostly on domestic interest rates, property trends, and sectors like industrial logistics, data centers, and healthcare. Its large size, easy trading, and low fees make it a simple way to invest in a wide range of U.S. real estate. RWX, on the other hand, invests in real estate companies in developed markets outside the U.S., such as Japan, Europe, and Australia. Because of this, factors like currency changes and different interest rate cycles can cause its performance to differ from U.S. REITs over time.
For investors, the central question is not which fund pays slightly more or charges less, but whether the portfolio should be anchored in U.S. REITs or broadened to international property markets. VNQ is a good choice for investors who want to focus on U.S. real estate because it is simple and efficient. RWX lets investors tap into international property markets, where returns can be shaped by different economies and interest rates.
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Eric Trie has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equinix, Prologis, and Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.
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