Which Is the Better Global Real Estate ETF, Vanguard's VNQI or the iShares REET?
Key Points
The iShares Global REIT ETF provides exposure to both domestic and international markets, while the Vanguard Global ex-U.S. Real Estate ETF focuses exclusively on non-U.S. assets.
The Vanguard Global ex-U.S. Real Estate ETF maintains a higher trailing-12-month dividend yield but has shown lower total returns over the past year.
The iShares Global REIT ETF has reached a larger assets under management figure of $4.9 billion compared to $3.8 billion for the Vanguard fund.
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The primary distinction between the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) and iShares Global REIT ETF (NYSEMKT:REET) is geographic scope, as the Vanguard fund excludes the United States while REET includes it.
Real estate investors often look abroad to diversify away from domestic market cycles and tap into different growth drivers. These two funds offer distinct approaches to that goal. While the iShares fund provides a broad global solution including the U.S. market, VNQI is specifically crafted to complement domestic portfolios by targeting only non-U.S. real estate investment trusts and operating entities.
Snapshot (cost & size)
| Metric | VNQI | REET |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.12% | 0.14% |
| 1-yr return (as of June 18, 2026) | 4.50% | 13.30% |
| Dividend yield | 4.80% | 3.40% |
| Beta | 0.72 | 0.93 |
| AUM | $3.8 billion | $4.9 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.
The Vanguard Global ex-U.S. Real Estate ETF is slightly more affordable with a 0.12% expense ratio. However, it currently offers a higher payout than its counterpart, with a trailing-12-month dividend yield of 4.80% versus 3.40% for the iShares fund.
Performance & risk comparison
| Metric | VNQI | REET |
|---|---|---|
| Max drawdown (5 yr) | (34.90%) | (32.20%) |
| Growth of $1,000 over 5 years (total return) | $941 | $1,147 |
What's inside
Focused entirely on the real estate sector, the iShares Global REIT ETF holds 322 positions, providing exposure to both developed and emerging markets worldwide. Its largest positions include Welltower at 8.13%, Prologis REIT at 7.29%, and Equinix REIT at 5.99%. This fund was launched in 2014 and maintains a trailing-12-month dividend of $0.93 per share.
In contrast, the Vanguard Global ex-U.S. Real Estate ETF is more broadly diversified with 682 holdings across more than 30 countries. Its top holdings include Goodman Group at 4.29%, Mitsubishi Estate at 2.84%, and Mitsui Fudosan at 2.46%. Launched in 2010, the fund allocates 93% to real estate and 1% to industrials; it 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
Investing in real estate is a great way to diversify a portfolio, and gain passive income since real estate investment trusts (REITs) provide high dividend yields. Both the iShares Global REIT ETF (REET) and Vanguard Global ex-U.S. Real Estate ETF (VNQI) offer global exposure to the real estate sector. Choosing between them comes down to a few key considerations.
REET’s holdings encompass all real estate markets including the U.S. This allows it to deliver truly global exposure, making it good for investors who are getting started in REITs. However, investors should note 73% of the fund’s holdings are in the U.S., so international exposure is minimal.
VNQI is focused only on international real estate. It’s ideal for investors who already own U.S.-based REITs as a means to diversify into other markets. It also boasts a higher dividend yield and lower costs, two factors that help maximize returns. However, VNQI has not performed as well as REET in its one-year and five-year return, and its exposure to foreign markets increase volatility and currency fluctuations.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equinix, Goodman Group, and Prologis. The Motley Fool has a disclosure policy.
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