VNQ vs. VNQI: Vanguard's Domestic and International Real Estate Funds Make a Natural Pair

Vanguard Real Estate ETF (NYSEMKT:VNQ) offers a concentrated portfolio of home REITs, portion Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) provides broader planetary diversification and a higher trailing yield.

Real property concern trusts (REITs) supply income and maturation potential, but geographic attraction tin displacement a portfolio’s hazard illustration significantly. While some funds originate from Vanguard, they service antithetic strategical roles. One focuses exclusively connected the home spot market, portion the different looks crossed much than 30 planetary markets to seizure planetary existent property trends.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

These Vanguard offerings are some low-cost, though the planetary money is somewhat much affordable with an disbursal ratio of 0.12%. Income-focused investors whitethorn find the planetary enactment much appealing, arsenic it provides a higher trailing dividend output of 4.50% compared to the 3.60% offered by the home existent property fund.

Performance & hazard examination

What's wrong

Vanguard Real Estate ETF (NYSEMKT:VNQ) tracks the MSCI US Investable Market Real Estate 25/50 Index and was launched successful 2004. It holds 158 stocks, and its largest positions see Welltower (NYSE:WELL) astatine 8.96%, Prologis (NYSE:PLD) astatine 8.19%, and Equinix (NASDAQ:EQIX) astatine 6.42%. Over the trailing 12 months, it has paid $3.49 per stock successful dividends.

Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) was launched successful 2010 and tracks the S&P Global ex-U.S. Property Index. It is importantly much diversified with 682 holdings crossed planetary markets. Top positions see Goodman Group astatine 3.36%, Mitsubishi Estate astatine 3.09%, and Mitsui Fudosan astatine 2.71%. It has paid $2.16 per stock implicit the trailing 12 months.

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What this means for investors

Vanguard offers 2 existent property ETFs that unneurotic screen the full planetary spot market. One is focused exclusively connected the U.S., the different connected everything extracurricular it. VNQ tracks home powerhouse REITs similar Welltower, Prologis, and Equinix, names that correspond healthcare facilities, logistics warehouses, and information halfway infrastructure. VNQI’s planetary existent property holdings see Japanese developers Mitsui Fudosan and Mitsubishi Estate, and Australian logistics elephantine Goodman Group.