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Dividend Vision

ETF Comparison

VNQ vs VYM: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Real Estate ETF and Vanguard High Dividend Yield ETF covering yield, cost, risk, and income potential.

Updated September 30, 2026

How these figures are calculated: methodology.

Best for

  • VNQInvestors who want higher current income (3.59% vs 2.29% for VYM).
  • VYMInvestors who want simple, diversified core exposure in one low-cost fund.

Jump to the side-by-side numbers

Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

VNQ has lagged VYM over the trailing twelve months, posting a 2.16% total return against 13.16%. The lead holds up over 10 years too: VYM has compounded at 11.36% a year, against 4.33% for VNQ. VYM has been the steadier holding, though — annualized volatility of 12.4% against 16.7% for VNQ. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD cumulative1Y cumulative3Y annualized5Y annualized10Y annualizedSince Nov 2006Volatility Sharpe Sortino Max drawdown
VNQ4.13%2.16%10.75%1.02%4.33%5.20%16.7%0.350.49-17.5%
VYM9.11%13.16%18.20%11.30%11.36%9.09%12.4%0.991.44-14.5%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of September 30, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Nov 2006” measures every fund from November 16, 2006 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricVNQVYM
Full nameVanguard Real Estate ETFVanguard High Dividend Yield ETF
IssuerVanguardVanguard
Underlying indexMSCI US IMI Real Estate 25/50 IndexFTSE High Dividend Yield Index
Last Close$89.63 as of September 30, 2026$155.20 as of September 30, 2026
Distribution rate3.59%2.29%
Trailing 12-month yield3.80%2.37%
Distribution Safety Score™ 9095
Safety-Adjusted Yield 3.23%2.18%
Expense ratio0.13%0.04%
AUM$36.5B$80.2B
Distribution frequencyQuarterlyQuarterly
ObjectiveTrack the MSCI US Investable Market Real Estate 25/50 Index.Seeks to track the performance of the FTSE High Dividend Yield Index, which offers exposure to dividend-paying large-cap companies that exhibit value characteristics within the U.S. equity market. The index includes stocks with a history of paying above-average dividends.
Asset classEquityEquity
Inception date09/23/200411/10/2006
Beta0.980.66
Last dividend$0.8046$0.887
Ex-dividend date09/23/202609/18/2026

Bottom lineChoose VNQ if you want higher current income (3.59% vs 2.29% for VYM). Choose VYM if you want simple, diversified core exposure in one low-cost fund.

Model this comparison:
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Income calculator

See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Vanguard
ETFs116
Total AUM$4677B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

See our curated list of related YouTube videos on VNQ and VYM.

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Quick verdict

VNQ (Vanguard Real Estate ETF) and VYM (Vanguard High Dividend Yield ETF) are both quarterly-pay dividend ETFs, but they take different approaches.

VNQ offers the higher yield at 3.59% vs 2.29% for VYM. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

VYM is cheaper with an expense ratio of 0.04% compared to 0.13%.

They have different reference exposures: VNQ is linked to MSCI US IMI Real Estate 25/50 Index while VYM is linked to FTSE High Dividend Yield Index, which means their performance drivers differ.

VYM is the larger fund by assets ($80.2B), but assets alone do not establish trading costs or liquidity.

Who should choose each?

Choose VNQ

Vanguard Real Estate ETF

  • Want higher current income — VNQ yields 3.59% vs 2.29% for VYM.
  • Want real-estate exposure for income and inflation sensitivity.

Choose VYM

Vanguard High Dividend Yield ETF

  • Want simple, diversified core exposure as a portfolio building block.
  • Want to keep costs low — a 0.04% expense ratio vs 0.13% for VNQ.
  • Prefer lower volatility — a beta of 0.7 vs 1.0 for VNQ.

Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.

Deep dive

Yield & income

On a $10,000 investment, VNQ would generate roughly $89.75 cash per distribution, while VYM would produce $57.25 cash per distribution, at current distribution rates. Both pay quarterly distributions.

VNQ yield3.59%
VYM yield2.29%
Cash diff on $10K$32.50

Cost & efficiency

Over 10 years on $10,000, VNQ would cost approximately $130 in fees vs $40 for VYM (simplified, not compounded). The $90.00 difference may be offset by yield or performance.

VNQ ER0.13%
VYM ER0.04%

Strategy & risk

VNQ tracks MSCI US IMI Real Estate 25/50 Index with a dividend approach, while VYM tracks FTSE High Dividend Yield Index. Beta is 0.98 for VNQ and 0.66 for VYM, making VYM the less volatile of the two by this measure.

VNQ beta0.98
VYM beta0.66

Fund details

VNQ is managed by Vanguard (launched 09/23/2004) with $36.5B in assets. VYM is managed by Vanguard (launched 11/10/2006) with $80.2B in assets.

VNQ AUM$36.5B
VYM AUM$80.2B
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Frequently asked questions

What is the current distribution rate for VNQ and VYM?

VNQ currently distributes 3.59% and VYM 2.29%, based on fund data updated September 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is VNQ or VYM better for dividend income?

It depends on your goals. VNQ currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between VNQ and VYM?

VNQ (Vanguard Real Estate ETF) tracks MSCI US IMI Real Estate 25/50 Index with a dividend approach, while VYM (Vanguard High Dividend Yield ETF) tracks FTSE High Dividend Yield Index. They are issued by Vanguard and Vanguard respectively.

Can I hold both VNQ and VYM?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Is VNQ or VYM safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — VYM scores 95, VNQ scores 90, so VYM's payout currently looks the more resilient of the two. VYM has also shown lower price volatility (beta 0.66 vs 0.98 for VNQ). No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, VNQ or VYM?

VNQ has an expense ratio of 0.13% while VYM charges 0.04%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in VNQ vs VYM generate?

At current rates, $10,000 in VNQ would generate roughly $89.75 cash per distribution ($359.00 annually). The same in VYM would produce about $57.25 cash per distribution ($229.00 annually).

Which has performed better historically, VNQ or VYM?

VNQ has lagged VYM over the trailing twelve months, posting a 2.16% total return against 13.16%. The lead holds up over 10 years too: VYM has compounded at 11.36% a year, against 4.33% for VNQ. VYM has been the steadier holding, though — annualized volatility of 12.4% against 16.7% for VNQ. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VNQ vs VYM — at a glance

Generated September 26, 2026.

Overview

VNQ and VYM are both dividend-focused Vanguard ETFs, but they track entirely different asset classes. VNQ provides broad exposure to U.S. real estate investment trusts (REITs) via the MSCI US IMI Real Estate index, while VYM targets large-cap dividend-paying stocks tracked by the FTSE High Dividend Yield index. The funds differ in yield, volatility, underlying economic exposure, and tax treatment.

How they differ

The clearest distinction is asset class: VNQ is a pure REIT fund with 3.59% yield, while VYM holds dividend-focused large-cap equities yielding 2.29%. VNQ's higher yield comes with higher volatility—its beta of 0.98 indicates REIT-market sensitivity, whereas VYM's 0.66 beta reflects lower cyclicality typical of large-cap dividend stocks. VNQ's $36.5B in assets dwarfs VYM's $80.2B, though both are substantial; VYM charges slightly less at 0.04% versus 0.13%, a negligible difference. REITs distribute income (and often return of capital) quarterly from operating cash flows and leverage, while VYM's payouts come from equity dividends and capital gains, a meaningful tax distinction for taxable accounts.

Who each is best for

  • VNQ: Fits investors seeking real estate market beta and higher current income, with a time horizon long enough to weather property-cycle volatility and REIT sector rotations. Works well in portfolios already heavy in equity exposure.
  • VYM: Designed for investors wanting dividend growth with lower volatility and large-cap stability, treating REITs as a separate tactical allocation. Complements broad-market or bond-heavy portfolios without adding real-estate-specific cyclical risk.

Key risks to know

  • REIT sensitivity to interest rates and property cycles. VNQ's 0.98 beta and real estate focus expose it to rising rate pressure, which compressed REIT valuations significantly in 2022–23. VYM's 0.66 beta insulates it from much of that sensitivity.
  • Yield sourcing differences. VNQ's 3.59% distribution may include substantial return of capital, eroding NAV over time if underlying property values don't grow; VYM's lower 2.29% yield is more likely to be sustainable from underlying dividend growth.
  • Tax treatment divergence. REIT distributions (VNQ) are taxed as ordinary income; equity dividends (VYM) may qualify for preferential long-term capital gains rates, creating a meaningful after-tax return gap in taxable accounts.
  • Overlap and diversification. Both funds track dividend-oriented indexes and may hold some of the same underlying stocks; verify holdings to confirm they serve distinct roles in your portfolio.
  • Concentration in dividend strategies. Both funds screen for high dividend payers, so they share factor overlap and may underperform in growth-led market cycles.

Bottom line

If you prioritize current income and are comfortable with property-cycle volatility, VNQ's 3.59% yield and pure real estate exposure stand out. If you want dividend growth with lower volatility and simpler tax reporting, VYM's 2.29% yield and large-cap stability fit a broader portfolio better. Past performance doesn't predict future results; the funds serve different strategic roles and shouldn't be compared as direct substitutes.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

Learn the method

The metrics behind this comparison, explained in the Academy.

What the distribution rate really tells you Why a high yield isn't high income How to read a fund's stats

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These comparisons follow the Dividend Vision methodology.