VNQ vs. VNQI: Vanguard's Domestic and International Real Estate Funds Make a Natural Pair
Key Points
Vanguard Real Estate ETF focuses on United States markets while Vanguard Global ex-U.S. Real Estate ETF provides international exposure across more than 30 countries.
Vanguard Global ex-U.S. Real Estate ETF has a lower expense ratio and a higher trailing dividend yield than Vanguard Real Estate ETF.
Vanguard Real Estate ETF has delivered higher total growth over the last five years but carries a higher beta profile.
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Vanguard Real Estate ETF (NYSEMKT:VNQ) offers a concentrated portfolio of domestic REITs, while Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) provides broader international diversification and a higher trailing yield.
Real estate investment trusts (REITs) provide income and growth potential, but geographic concentration can shift a portfolio’s risk profile significantly. While both funds originate from Vanguard, they serve different strategic roles. One focuses exclusively on the domestic property market, while the other looks across more than 30 international markets to capture global real estate trends.
Snapshot (cost & size)
| Metric | VNQI | VNQ |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Expense ratio | 0.12% | 0.13% |
| 1-yr return (as of May 7, 2026) | 14.10% | 12.70% |
| Dividend yield | 4.50% | 3.60% |
| Beta | 0.73 | 1.00 |
| AUM | $3.7 billion | $64.6 billion |
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. Dividend yield is the trailing-12-month distribution yield.
These Vanguard offerings are both low-cost, though the international fund is slightly more affordable with an expense ratio of 0.12%. Income-focused investors may find the international option more appealing, as it provides a higher trailing dividend yield of 4.50% compared to the 3.60% offered by the domestic real estate fund.
Performance & risk comparison
| Metric | VNQI | VNQ |
|---|---|---|
| Max drawdown (5 yr) | (35.80%) | (34.50%) |
| Growth of $1,000 over 5 years (total return) | $999 | $1,185 |
What's inside
Vanguard Real Estate ETF (NYSEMKT:VNQ) tracks the MSCI US Investable Market Real Estate 25/50 Index and was launched in 2004. It holds 158 stocks, and its largest positions include Welltower (NYSE:WELL) at 8.96%, Prologis (NYSE:PLD) at 8.19%, and Equinix (NASDAQ:EQIX) at 6.42%. Over the trailing 12 months, it has paid $3.49 per share in dividends.
Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) was launched in 2010 and tracks the S&P Global ex-U.S. Property Index. It is significantly more diversified with 682 holdings across international markets. Top positions include Goodman Group at 3.36%, Mitsubishi Estate at 3.09%, and Mitsui Fudosan at 2.71%. It has paid $2.16 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Vanguard offers two real estate ETFs that together cover the entire global property market. One is focused exclusively on the U.S., the other on everything outside it. VNQ tracks domestic powerhouse REITs like Welltower, Prologis, and Equinix, names that represent healthcare facilities, logistics warehouses, and data center infrastructure. VNQI’s international real estate holdings include Japanese developers Mitsui Fudosan and Mitsubishi Estate, and Australian logistics giant Goodman Group.
Both funds charge nearly identical fees, making the choice purely about geographic preference rather than cost. VNQI offers a higher trailing yield, which may appeal to income-focused investors, though currency risk and varying international property cycles add complexity that domestic-only VNQ avoids entirely.
VNQ is significantly larger and more liquid, with a long track record anchored in familiar U.S. markets. Investors who already hold broad U.S. real estate through VNQ will find VNQI a natural complement for adding international diversification, and many long-term investors own both.
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Sara Appino 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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