Which Is the Better Real Estate ETF, Vanguard's Domestic-Focused VNQ or State Street's International RWX?
Key Points
The State Street SPDR Dow Jones International Real Estate ETF carries a significantly higher expense ratio of 0.59% compared to the 0.13% charged by the Vanguard Real Estate ETF.
The Vanguard Real Estate ETF focuses on the domestic market with assets under management (AUM) of $64.6 billion, while the State Street SPDR Dow Jones International Real Estate ETF targets properties outside the United States.
Both funds currently offer an identical trailing-12-month distribution yield of 3.6%, although their geographical exposures and performance histories differ.
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The Vanguard Real Estate ETF (NYSEMKT:VNQ) offers low-cost exposure to the domestic property market, whereas the State Street SPDR Dow Jones International Real Estate ETF (NYSEMKT:RWX) provides a gateway to international real estate at a higher price point.
Real estate investment trusts (REITs) can serve as a powerful diversifier, providing income and long-term capital growth. While the Vanguard fund tracks a broad index of domestic real estate companies, the State Street fund looks abroad to capture the performance of international property markets, excluding the United States, which could offer protection against domestic economic shifts.
Snapshot (cost & size)
| Metric | VNQ | RWX |
|---|---|---|
| Issuer | Vanguard | SPDR |
| Expense ratio | 0.13% | 0.59% |
| 1-yr return (as of May 7, 2026) | 13.44% | 12.40% |
| Dividend yield | 3.60% | 3.60% |
| Beta | 1.00 | 0.78 |
| AUM | $64.6 billion | $276.9 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. Dividend yield is the trailing-12-month distribution yield.
Investors may find the Vanguard fund more affordable, as its 0.13% expense ratio is significantly lower than the 0.59% fee for the State Street fund. While both ETFs currently offer an identical 3.60% trailing-12-month distribution yield, the total cost of ownership differs considerably between the two.
Performance & risk comparison
| Metric | VNQ | RWX |
|---|---|---|
| Max drawdown (5 yr) | (34.50%) | (35.90%) |
| Growth of $1,000 over 5 years (total return) | $1,185 | $938 |
What's inside
The State Street SPDR Dow Jones International Real Estate ETF provides exposure to 121 holdings across international property markets. Its portfolio is weighted toward real estate at 60%, with a notable 40% in cash and other assets. Largest positions include Mitsui Fudosan (TYO:8801) at 6.52%, Swiss Prime Site (SIX:SPSN) at 2.98%, and Scentre Group (ASX:SCG) at 2.80%. This fund, which tracks the Dow Jones Global ex-U.S. Select Real Estate Securities Index, was launched in 2006 and paid $1.02 per share over the trailing 12 months.
In contrast, the Vanguard Real Estate ETF holds 158 stocks and focuses almost entirely on domestic assets, with real estate making up 97% of the portfolio. Its top holdings include Welltower (NYSE:WELL) at 8.96%, Prologis (NYSE:PLD) at 8.19%, and Equinix (NASDAQ:EQIX) at 6.42%. The Vanguard fund tracks the MSCI US Investable Market Real Estate 25/50 Index, was launched in 2004, and has a trailing-12-month dividend of $3.49 per share.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Real estate helps to diversify and round out a portfolio’s assets, and REITs are a great way to capture robust dividend income. Both the State Street SPDR Dow Jones International Real Estate ETF (RWX) and Vanguard Real Estate ETF (VNQ) deliver this to you. Choosing between them depends on a few key factors.
VNQ is for investors who want to focus on U.S. real estate. This ETF provides a low expense ratio and a far greater AUM, which offers superior liquidity compared to RWX. However, since the fund targets only the U.S., any downturn in the market can cause the fund’s performance to suffer.
RWX is the better choice for investors seeking international real estate exposure, and the diversification delivered through multiple markets. The downsides are its higher expense ratio, which eats into your returns, and its far smaller AUM.
Investing in both VNQ and RWX is also an approach to consider. This ensures global exposure to real estate markets, while providing the diversification to offset downturns in any given country.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.
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