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ETF Comparison

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

A head-to-head comparison of Vanguard Real Estate ETF and Real Estate Select Sector SPDR Fund covering yield, cost, risk, and income potential.

Data updated August 13, 2026

Best for

  • VNQInvestors who want real-estate income and inflation sensitivity.
  • XLREInvestors who want broad equity exposure.

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.
MetricVNQXLRE
Full nameVanguard Real Estate ETFReal Estate Select Sector SPDR Fund
IssuerVanguardState Street
Last Close$97.31 as of August 13, 2026$44.49 as of August 13, 2026
Distribution yield3.52%3.43%
Distribution Safety Score™ 9290
Expense ratio0.12%0.09%
AUM$39.3B$8.63B
Distribution frequencyQuarterlyQuarterly
Underlying indexMSCI US IMI Real Estate 25/50 IndexReal Estate Select Sector Index
ObjectiveTrack the MSCI US Investable Market Real Estate 25/50 Index.Tracks the Real Estate Select Sector Index from the S&P 500.
Asset classEquityEquity
Inception date09/23/200410/07/2015
Beta0.990.99
Last dividend$0.8554$0.3811
Ex-dividend date06/24/202606/22/2026

Bottom lineChoose VNQ if you want real-estate income and inflation sensitivity. Choose XLRE if you want broad equity exposure.

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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.

See all Vanguard ETFs
State Street
ETFs180
Total AUM$2127B

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

State Street Global Advisors (SSGA) is one of the largest ETF providers globally, known for its flagship SPDR suite of exchange-traded products that serve both institutional and retail investors across a broad range of asset classes. Their 88-fund lineup spans diverse strategies including sector exposure (Select Sector SPDR), income generation (Income and Select Sector SPDR Premium Income families), commodities (including the widely-held GLD gold ETF), bonds, ESG-focused investments, and thematic allocations, with popular tickers like DIA (Diamonds Trust), FEZ (Eurozone exposure), and JNK (high-yield bonds) among their most recognized funds. The issuer is characterized by its comprehensive coverage across multiple market segments and its emphasis on both traditional index-based products and specialized strategies like covered call income funds and factor-based investing.

See our curated list of related YouTube videos on XLRE.

See all State Street ETFs

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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 outpaced XLRE over the trailing twelve months, posting a 14.25% total return against 12.22%. The picture flips over 10 years, though — XLRE has compounded at 6.37% a year, ahead of VNQ at 4.88%. 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 Oct 2015Volatility Sharpe Sortino Max drawdown
VNQ12.08%14.25%9.82%2.16%4.88%6.05%16.9%0.290.41-17.5%
XLRE11.89%12.22%9.86%2.59%6.37%7.23%16.9%0.290.41-16.6%

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 Oct 2015” measures every fund from October 8, 2015 — 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 XLRE (Real Estate Select Sector SPDR Fund) are both quarterly-pay dividend ETFs, but they take different approaches.

VNQ offers the higher yield at 3.52% vs 3.43% for XLRE. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

XLRE is cheaper with an expense ratio of 0.09% compared to 0.12%.

They track different benchmarks: VNQ is linked to MSCI US IMI Real Estate 25/50 Index while XLRE tracks Real Estate Select Sector Index, which means their performance drivers differ.

VNQ is the larger fund by assets ($39.3B), which generally means tighter spreads and better liquidity.

Deep dive

Yield & income

On a $10,000 investment, VNQ would generate roughly $29.33/month, while XLRE would produce $28.58/month, at current distribution rates. Both pay quarterly distributions.

VNQ yield3.52%
XLRE yield3.43%
Monthly diff on $10K$0.75

Cost & efficiency

Over 10 years on $10,000, VNQ would cost approximately $120 in fees vs $90 for XLRE (simplified, not compounded). The $30.00 difference may be offset by yield or performance.

VNQ ER0.12%
XLRE ER0.09%

Strategy & risk

VNQ tracks MSCI US IMI Real Estate 25/50 Index with a dividend approach, while XLRE tracks Real Estate Select Sector Index.

VNQ beta0.99
XLRE beta0.99

Fund details

VNQ is managed by Vanguard (launched 09/23/2004) with $39.3B in assets. XLRE is managed by State Street (launched 10/07/2015) with $8.63B in assets.

VNQ AUM$39.3B
XLRE AUM$8.63B
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Frequently asked questions

What is the current distribution yield for VNQ and XLRE?

VNQ currently distributes 3.52% and XLRE 3.43%, 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 XLRE 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 XLRE?

VNQ (Vanguard Real Estate ETF) tracks MSCI US IMI Real Estate 25/50 Index with a dividend approach, while XLRE (Real Estate Select Sector SPDR Fund) tracks Real Estate Select Sector Index. They are issued by Vanguard and State Street respectively.

Can I hold both VNQ and XLRE?

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 XLRE safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — they are effectively tied: VNQ scores 92, XLRE scores 90. Neither has a clear safety edge on that measure. No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, VNQ or XLRE?

VNQ has an expense ratio of 0.12% while XLRE charges 0.09%. Lower fees mean more of your investment returns stay in your pocket over time.

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

At current rates, $10,000 in VNQ would generate roughly $29.33 per month ($352.00 annually). The same in XLRE would produce about $28.58 per month ($343.00 annually).

Which has performed better historically, VNQ or XLRE?

VNQ has outpaced XLRE over the trailing twelve months, posting a 14.25% total return against 12.22%. The picture flips over 10 years, though — XLRE has compounded at 6.37% a year, ahead of VNQ at 4.88%. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VNQ vs XLRE — at a glance

Generated August 8, 2026.

Overview

VNQ and XLRE are both real estate ETFs tracking different REIT indexes, offering quarterly dividend income with low fees. The key distinction: VNQ holds the broader investable market of U.S. REITs (mid-caps and large-caps via the MSCI index), while XLRE holds only the real estate sector of the S&P 500, making it a narrower, mega-cap exposure.

How they differ

VNQ tracks the MSCI US Investable Market Real Estate Index, capturing REITs across the full market-cap spectrum, whereas XLRE tracks only the real estate stocks within the S&P 500, excluding smaller and mid-cap REIT names. VNQ has $39.3B in AUM versus XLRE's $8.63B, giving VNQ considerably more trading liquidity and lower bid-ask spreads. Both yield around 3.4% quarterly, but VNQ's 0.12% expense ratio is slightly higher than XLRE's 0.09%; over 20 years that difference compounds to meaningful cost drag on a $100,000 position. Their betas are virtually identical at 1.0 and 0.99, signaling similar market sensitivity.

Who each is best for

VNQ: Fits investors seeking broad real estate exposure across market capitalizations, valuing index comprehensiveness and the scale of a $39.3B fund's liquidity.

XLRE: Fits investors who prefer S&P 500 constituents only—a mega-cap REIT basket—and prioritize the lower 0.09% expense ratio for cost efficiency.

Key risks to know

  • Concentration in mega-cap REITs. XLRE's S&P 500 filter means its holdings are likely concentrated in the largest, most-liquid real estate companies; if large-cap REIT valuations compress, the fund has less diversification into mid-market names that VNQ may hold.
  • Interest rate sensitivity. Both funds are exposed to rising rates, which lower REIT valuations by increasing cap rates and competing debt yields. A sharp rate spike would pressure both funds similarly, though the effect on smaller REITs (in VNQ but not XLRE) is harder to predict.
  • Sector-specific downturn risk. Real estate is cyclical; economic slowdown, commercial occupancy stress, or cap rate expansion can depress distributions and NAV across both funds simultaneously, limiting diversification benefit between them.
  • Overlap in top holdings. While VNQ's broader index likely contains many of XLRE's mega-cap holdings, performance divergence depends on mid-cap REIT performance—a factor not visible without detailed holdings data.

Bottom line

VNQ offers market-cap-weighted breadth across the REIT universe with a 19-year track record and substantial liquidity, while XLRE provides S&P 500-only purity at a slightly lower expense ratio and smaller scale. If you value comprehensive REIT market exposure, VNQ's index design and size stand out; if you prefer the discipline of S&P 500 constituents and lower fees, XLRE appeals to that investor profile. Past performance does not predict future results.

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

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