Vanguard Real Estate ETF Outperforms SPDR on Yield and Size
Vanguard's VNQ offers a 3.7% yield and $70.8B in assets, beating State Street's XLRE on diversification despite a higher fee.
Key points
- Vanguard's VNQ offers a 3.7% dividend yield, higher than State Street's XLRE at 3.3%.
- Vanguard holds 139 stocks versus 30 for State Street, providing broader diversification.
- Vanguard manages $70.8 billion in assets, significantly larger than State Street's $8.3 billion.
Vanguard's real estate ETF offers higher income and broader holdings than State Street's SPDR fund. As of September 18, 2026, VNQ shares trade at $92.91, while XLRE is priced at $42.53.
Both funds track U.S. real estate investment trusts, but they differ in scope and cost. The comparison highlights a trade-off between Vanguard's wide diversification and the SPDR fund's lower expense ratio.
Costs and yields differ slightly
State Street charges a 0.08% annual fee, lower than Vanguard's 0.13%. However, VNQ provides a 3.7% dividend yield, compared to XLRE's 3.3%.
Over the past year, VNQ returned 6.1%, slightly ahead of XLRE's 5.5%. Both funds show a beta of 0.98, indicating similar volatility relative to the S&P 500.
Holdings show different breadth
Vanguard holds 139 stocks, including small and mid-cap companies. Its top positions are Welltower at 10.23%, Prologis at 8.08%, and Equinix at 6.39%.
State Street holds only 30 large-cap stocks. Welltower is its largest holding at 11.19%, followed by Prologis at 8.70% and Equinix at 6.84%.
Vanguard leads in asset size
Vanguard manages $70.8 billion in assets, far exceeding State Street's $8.3 billion. This size difference supports greater liquidity and broader market exposure.
According to fool.com, the higher yield and diversification of VNQ offset its slightly higher cost. The SPDR fund remains a cheaper option for investors preferring concentrated large-cap exposure.
