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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 Index Fund ETF Shares covering yield, cost, risk, and income potential.

Data updated August 13, 2026

Best for

  • VNQInvestors who want higher current income (3.52% vs 2.35% for VYM).
  • VYMInvestors who want simple, diversified core exposure in one low-cost fund.

Jump to the side-by-side numbers

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 Index Fund ETF Shares
IssuerVanguardVanguard
Last Close$97.31 as of August 13, 2026$166.67 as of August 13, 2026
Distribution yield3.52%2.35%
Distribution Safety Score™ 9295
Expense ratio0.12%0.06%
AUM$39.3B$83.4B
Distribution frequencyQuarterlyQuarterly
Underlying indexMSCI US IMI Real Estate 25/50 Indexa basket of Vanguard High Dividend Yield ETF holdings
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
Beta0.990.68
Last dividend$0.8554$0.9800
Ex-dividend date06/24/202606/18/2026

Bottom lineChoose VNQ if you want higher current income (3.52% vs 2.35% for VYM). Choose VYM if you want simple, diversified core exposure in one low-cost fund.

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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$4657B

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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Visual comparison

Key metrics

Projected income on $10K

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

Total returns

VNQ has lagged VYM over the trailing twelve months, posting a 14.25% total return against 26.45%. The lead holds up over 10 years too: VYM has compounded at 11.92% a year, against 4.88% for VNQ. VYM has been the steadier holding, though — annualized volatility of 12.5% against 16.9% 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.
SymbolYTD1Y3Y5Y10YSince Nov 2006Volatility Sharpe Sortino Max drawdown
VNQ12.08%14.25%9.82%2.16%4.88%5.63%16.9%0.290.41-17.5%
VYM16.53%26.45%18.54%12.27%11.92%9.52%12.5%1.011.46-14.5%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of August 12, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Nov 2006” measures every fund from November 16, 2006 — the youngest fund's first trading day — 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.

Quick verdict

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

VNQ offers the higher yield at 3.52% vs 2.35% 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 0.06% compared to 0.12%.

They track different benchmarks: VNQ is linked to MSCI US IMI Real Estate 25/50 Index while VYM tracks a basket of Vanguard High Dividend Yield ETF holdings, which means their performance drivers differ.

VYM is the larger fund by assets ($83.4B), which generally means tighter spreads and better liquidity.

Who should choose each?

Choose VNQ

Vanguard Real Estate ETF

  • Want higher current income — VNQ yields 3.52% vs 2.35% for VYM.
  • Want real-estate exposure for income and inflation sensitivity.

Choose VYM

Vanguard High Dividend Yield Index Fund ETF Shares

  • Want simple, diversified core exposure as a portfolio building block.
  • Want to keep costs low — a 0.06% expense ratio vs 0.12% 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 $29.33/month, while VYM would produce $19.58/month, at current distribution rates. Both pay quarterly distributions.

VNQ yield3.52%
VYM yield2.35%
Monthly diff on $10K$9.75

Cost & efficiency

Over 10 years on $10,000, VNQ would cost approximately $120 in fees vs $60 for VYM (simplified, not compounded). The $60.00 difference may be offset by yield or performance.

VNQ ER0.12%
VYM ER0.06%

Strategy & risk

VNQ tracks MSCI US IMI Real Estate 25/50 Index with a dividend approach, while VYM holds a basket of Vanguard High Dividend Yield ETF holdings with an index approach. Beta is 0.99 for VNQ and 0.68 for VYM, indicating VYM is less volatile relative to the market.

VNQ beta0.99
VYM beta0.68

Fund details

VNQ is managed by Vanguard (launched 09/23/2004) with $39.3B in assets. VYM is managed by Vanguard (launched 11/10/2006) with $83.4B in assets.

VNQ AUM$39.3B
VYM AUM$83.4B
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Frequently asked questions

What is the current distribution yield for VNQ and VYM?

VNQ currently distributes 3.52% and VYM 2.35%, based on fund data updated August 2026. Distribution yield 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 Index Fund ETF Shares) holds a basket of Vanguard High Dividend Yield ETF holdings with an index approach. 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 92, so VYM's payout currently looks the more resilient of the two. VYM has also shown lower price volatility (beta 0.68 vs 0.99 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 0.12% while VYM charges 0.06%. 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 $29.33 per month ($352.00 annually). The same in VYM would produce about $19.58 per month ($235.00 annually).

Which has performed better historically, VNQ or VYM?

VNQ has lagged VYM over the trailing twelve months, posting a 14.25% total return against 26.45%. The lead holds up over 10 years too: VYM has compounded at 11.92% a year, against 4.88% for VNQ. VYM has been the steadier holding, though — annualized volatility of 12.5% against 16.9% 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 August 8, 2026.

Overview

VNQ and VYM are both Vanguard equity ETFs focused on income, but they track fundamentally different markets. VNQ is a REIT fund tracking the MSCI US Real Estate index, giving you concentrated exposure to property companies. VYM is a large-cap dividend-equity fund tracking the FTSE High Dividend Yield index, giving you exposure to dividend-paying stocks across the broad economy. The choice between them hinges on whether you want real estate specifically or diversified dividend stocks.

How they differ

The biggest difference is asset class: VNQ holds real estate investment trusts exclusively, while VYM holds dividend-focused large-cap stocks across all sectors. This means VNQ's 3.48% distribution rate comes from property rents and real estate operations, while VYM's 2.37% yield comes from corporate dividends and buybacks—fundamentally different income streams.

Second, VNQ carries a beta of 1.0 (tracking overall market movement) while VYM's beta of 0.69 suggests lower volatility relative to the broader market, reflecting large-cap dividend stocks' defensive characteristics. VYM is also larger at $83.4B in assets versus VNQ's $39.3B, and charges a lower expense ratio at 0.06% versus 0.12%, though both are cheap.

Both distribute quarterly and track passive indexes, so performance depends entirely on underlying index returns rather than active management skill.

Who each is best for

VNQ: Fits investors who want explicit real estate exposure as part of a diversified portfolio and are comfortable with higher volatility tied to property markets, interest rates, and leverage within the REIT sector.

VYM: Fits investors seeking stable dividend income from large, established companies across multiple sectors, with a preference for lower volatility and broader equity diversification beyond real estate.

Key risks to know

  • Real estate concentration (VNQ): A REIT-only fund has no exposure to non-real-estate businesses. Economic shocks that hit property values, occupancy, or construction disproportionately affect returns; your income stream depends entirely on one asset class.
  • Interest rate sensitivity (VNQ): REITs typically use leverage to finance acquisitions and operations. Rising rates increase borrowing costs, compressing both REIT valuations and dividend growth—a structural headwind VYM's stock portfolio avoids.
  • Sector overlap risk: While VYM holds broad large-cap stocks, financial and utility companies (which often pay above-average dividends) may be overweighted relative to the broader market. Verify sector weights if sector concentration concerns you.
  • Yield sustainability (VNQ): At 3.48%, the distribution is materially higher than VYM's 2.37%. Confirm that payout ratios remain sustainable; elevated yields can signal market expectations of slower REIT earnings growth.
  • Beta divergence: VYM's lower beta of 0.69 suggests it will outperform in down markets but lag in strong rallies. If you expect rising equity markets, VNQ's market-tracking beta may deliver better total returns despite greater volatility.

Bottom line

If you want diversified dividend income from large companies across the economy, VYM's lower cost, lower volatility, and broader exposure stands out. If you want direct real estate exposure and accept higher yield and higher volatility as the tradeoff, VNQ is the fit—but verify that REIT yields remain supported by earnings. Past performance does not guarantee future results.

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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