SCHH vs. VNQI: Which Real Estate ETF Is the Better Buy in 2026?
Key Points
Schwab U.S. REIT ETF offers a more concentrated domestic portfolio with a lower expense ratio than its international Vanguard counterpart.
Vanguard Global ex-U.S. Real Estate ETF provides exposure to over 30 countries and a higher dividend yield but has lagged in total returns over the last five years.
The Schwab fund manages significantly more assets under management and focuses almost exclusively on the United States real estate market.
- 10 stocks we like better than Schwab Strategic Trust - Schwab U.s. REIT ETF ›
Choosing between the Schwab U.S. REIT ETF (NYSEMKT:SCHH) and the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) depends on whether an investor seeks domestic concentration or broad international diversification within the property sector.
Both funds provide targeted real estate exposure, but their geographical footprints are opposites. Schwab U.S. REIT ETF tracks domestic equity real estate investment trusts. In contrast, Vanguard Global ex-U.S. Real Estate ETF excludes the United States entirely, capturing property markets across more than 30 other countries to serve as a broad global diversifier.
Snapshot (cost & size)
| Metric | VNQI | SCHH |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Share price | $45.33 (as of 2026-07-02) | $24.07 (as of 2026-07-02) |
| Expense ratio | 0.12% | 0.07% |
| 1-yr return (as of 2026-07-02) | 2.20% | 16.20% |
| Dividend yield | 4.80% | 2.80% |
| Beta | 0.95 | 0.98 |
| AUM | $3.8 billion | $11.3 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 Schwab fund is more affordable with a 0.07% expense ratio compared to 0.12% for the Vanguard fund. However, investors prioritizing income may prefer the higher payout from the international portfolio, which currently offers a 4.80% yield.
Performance & risk comparison
| Metric | VNQI | SCHH |
|---|---|---|
| Max drawdown (5 yr) | (34.90%) | (33.30%) |
| Growth of $1,000 over 5 years (total return) | $945 | $1,206 |
What's inside
Schwab U.S. REIT ETF holds 122 positions, primarily in the real estate sector, which accounts for 99.00% of the portfolio. Its largest positions include Welltower (NYSE:WELL) at 10.81%, Prologis (NYSE:PLD) at 8.44%, and Simon Property Group (NYSE:SPG) at 4.78%. This fund was launched in 2011. Schwab U.S. REIT ETF has paid $0.66 per share over the trailing 12 months, which, on its recent ~$24.07 share price, works out to a 2.80% yield.
Vanguard Global ex-U.S. Real Estate ETF is much broader, holding 682 positions across various international property markets. Its sector allocation is 98.00% real estate, 1.00% consumer cyclical, and 1.00% industrials. Top holdings include Goodman Group (ASX:GMG.AX) at 4.29%, Mitsubishi Estate (TSE:8802) at 2.84%, and Mitsui Fudosan (TSE:8801) at 2.46%. The fund was launched in 2010. Vanguard Global ex-U.S. Real Estate ETF has paid $2.16 per share over the trailing 12 months, which, on its recent ~$45.33 share price, works out to a 4.80% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which ETF is the better buy?
The Vanguard fund’s higher yield will certainly appeal to investors interested in dividend income. Still, Schwab has delivered much superior returns over a longer market cycle, as noted by its trailing 1- and 5-year returns.
SCHH also combines a high-yielding REIT portfolio with some exposure to the growing data center market. The top U.S.-based REITs are invested in data center infrastructure. Its focus on high-quality REITs in the U.S. market may enable the fund to continue delivering superior returns.
However, investors don’t have to decide between SCHH and VNQI. These funds work well as complementary holdings, with Schwab covering the U.S. market and Vanguard adding exposure to international real estate. The choice comes down to each investor’s diversification and income goals.
Should you buy stock in Schwab Strategic Trust - Schwab U.s. REIT ETF right now?
Before you buy stock in Schwab Strategic Trust - Schwab U.s. REIT ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab Strategic Trust - Schwab U.s. REIT ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $407,651!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,252,823!*
Now, it’s worth noting Stock Advisor’s total average return is 922% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 9, 2026.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Prologis and Simon Property Group. The Motley Fool has a disclosure policy.
Recommended Articles
