PortfoliosLab logoPortfoliosLab logo

Documentation

Upgrade your plan
IWM vs. VNQ
Performance
Return for Risk
Drawdowns
Volatility
Dividends

IWM vs. VNQ

Last updated Jun 12, 2026

IWM (iShares Russell 2000 ETF) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - IWM is a Small Cap Blend Equities fund tracking the Russell 2000 Index, while VNQ is a REIT fund tracking the MSCI US Investable Market Real Estate 25/50 Index. Both are passively managed. Over the past 10 years, IWM returned 11.14%/yr vs 5.53%/yr for VNQ. A 0.67 correlation means they provide meaningful diversification when combined. IWM charges 0.19%/yr vs 0.13%/yr for VNQ.

Performance

IWM vs. VNQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Russell 2000 ETF (IWM) and Vanguard Real Estate ETF (VNQ). The values are adjusted to include any dividend payments, if applicable.

Loading charts...

Returns By Period

In the year-to-date period, IWM achieves a 18.19% return, which is significantly higher than VNQ's 11.49% return. Over the past 10 years, IWM has outperformed VNQ with an annualized return of 11.14%, while VNQ has yielded a comparatively lower 5.53% annualized return.

IWM

1D
2.96%
1M
2.77%
YTD
18.19%
6M
13.23%
1Y
37.41%
3Y*
17.34%
5Y*
5.88%
10Y*
11.14%

VNQ

1D
-0.07%
1M
0.95%
YTD
11.49%
6M
11.16%
1Y
12.43%
3Y*
10.04%
5Y*
2.36%
10Y*
5.53%
*Multi-year figures are annualized to reflect compound growth (CAGR)

IWM vs. VNQ - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
IWM
iShares Russell 2000 ETF		18.19%12.66%11.38%16.83%-20.48%14.54%20.03%25.39%-11.12%14.58%
VNQ
Vanguard Real Estate ETF		11.49%3.24%4.81%11.85%-26.25%40.54%-4.61%28.91%-6.03%4.90%

Correlation

The correlation between IWM and VNQ is 0.50, which is low. Their price movements are largely independent, making them effective diversification partners.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.50

Correlation (3Y)
Calculated over the trailing 3-year period

0.61

Correlation (5Y)
Calculated over the trailing 5-year period

0.66

Correlation (10Y)
Calculated over the trailing 10-year period

0.60

Correlation (All Time)
Calculated using the full available price history since Sep 29, 2004

0.67

The correlation between IWM and VNQ shifts across timeframes, from 0.50 (1 year) to 0.67 (all time), reflecting how their relationship changes across market environments.

IWM vs. VNQ - Sectors Allocation Comparison

Sectors
IWM
VNQ

Technology

19.5%
0.3%

Industrials

17.2%
0.0%

Healthcare

16.1%

-

Financial Services

15.6%
0.1%

Consumer Cyclical

7.9%

-

Energy

5.8%
0.1%

Real Estate

5.6%
97.3%

Basic Materials

4.5%
1.1%

Utilities

3.0%

-

Consumer Defensive

2.1%

-

Communication Services

2.1%
0.6%

Technology

IWM
19.5%
VNQ
0.3%

Industrials

IWM
17.2%
VNQ
0.0%

Healthcare

IWM
16.1%
VNQ

-

Financial Services

IWM
15.6%
VNQ
0.1%

Consumer Cyclical

IWM
7.9%
VNQ

-

Energy

IWM
5.8%
VNQ
0.1%

Real Estate

IWM
5.6%
VNQ
97.3%

Basic Materials

IWM
4.5%
VNQ
1.1%

Utilities

IWM
3.0%
VNQ

-

Consumer Defensive

IWM
2.1%
VNQ

-

Communication Services

IWM
2.1%
VNQ
0.6%

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

iShares Russell 2000 ETF

Vanguard Real Estate ETF

Often compared with IWM:
IWM vs. SPYIWM vs. VTWOIWM vs. IJRIWM vs. AVUVIWM vs. IWNIWM vs. VOOIWM vs. IWO
Often compared with VNQ:
VNQ vs. SCHHVNQ vs. VOOVNQ vs. SPYVNQ vs. XLREVNQ vs. VNQIVNQ vs. SCHDVNQ vs. REET

Return for Risk

IWM vs. VNQ — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
IWM
IWM Risk / Return Rank: 7272
Overall Rank
IWM Sharpe Ratio Rank: 7272
Sharpe Ratio Rank
IWM Sortino Ratio Rank: 7171
Sortino Ratio Rank
IWM Omega Ratio Rank: 6363
Omega Ratio Rank
IWM Calmar Ratio Rank: 7979
Calmar Ratio Rank
IWM Martin Ratio Rank: 7777
Martin Ratio Rank
VNQ
VNQ Risk / Return Rank: 3232
Overall Rank
VNQ Sharpe Ratio Rank: 3131
Sharpe Ratio Rank
VNQ Sortino Ratio Rank: 2929
Sortino Ratio Rank
VNQ Omega Ratio Rank: 2929
Omega Ratio Rank
VNQ Calmar Ratio Rank: 3636
Calmar Ratio Rank
VNQ Martin Ratio Rank: 3636
Martin Ratio Rank
The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

IWM vs. VNQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Russell 2000 ETF (IWM) and Vanguard Real Estate ETF (VNQ). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

IWMVNQDifference
Sharpe ratioReturn per unit of total volatility
1.91
0.92

+0.98

Sortino ratioReturn per unit of downside risk
2.65
1.35

+1.30

Omega ratioGain probability vs. loss probability

1.31

1.17

+0.15

Calmar ratioReturn relative to maximum drawdown

3.41

1.50

+1.91

Martin ratioReturn relative to average drawdown

12.04

4.71

+7.33

IWM vs. VNQ - Sharpe Ratio Comparison

The current IWM Sharpe Ratio is 1.91, which is higher than the VNQ Sharpe Ratio of 0.92. The chart below compares the historical Sharpe Ratios of IWM and VNQ, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Loading charts...

Drawdowns

IWM vs. VNQ - Drawdown Comparison

The maximum IWM drawdown since its inception was -59.05%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for IWM and VNQ.

Loading charts...

Drawdown Indicators

IWMVNQDifference

Max Drawdown

Largest peak-to-trough decline

-59.05%

-73.07%

+14.02%

Max Drawdown (1Y)

Largest decline over 1 year

-11.03%

-8.34%

-2.69%

Max Drawdown (3Y)

Largest decline over 3 years

-27.50%

-17.46%

-10.04%

Max Drawdown (5Y)

Largest decline over 5 years

-31.91%

-34.48%

+2.57%

Max Drawdown (10Y)

Largest decline over 10 years

-41.13%

-42.40%

+1.27%

Current Drawdown

Current decline from peak

-0.55%

-0.49%

-0.06%

Average Drawdown

Average peak-to-trough decline

-10.76%

-13.61%

+2.85%

Ulcer Index

Depth and duration of drawdowns from previous peaks

3.12%

2.65%

+0.47%

Volatility

IWM vs. VNQ - Volatility Comparison

iShares Russell 2000 ETF (IWM) has a higher volatility of 7.12% compared to Vanguard Real Estate ETF (VNQ) at 4.74%. This indicates that IWM's price experiences larger fluctuations and is considered to be riskier than VNQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Loading charts...

Volatility by Period

IWMVNQDifference

Volatility (1M)

Calculated over the trailing 1-month period

7.12%

4.74%

+2.38%

Volatility (6M)

Calculated over the trailing 6-month period

14.32%

9.74%

+4.58%

Volatility (1Y)

Calculated over the trailing 1-year period

19.72%

13.52%

+6.20%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

22.61%

18.85%

+3.76%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

23.08%

20.72%

+2.36%

IWM vs. VNQ - Expense Ratio Comparison

IWM has a 0.19% expense ratio, which is higher than VNQ's 0.13% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

IWM vs. VNQ - Dividend Comparison

IWM's dividend yield for the trailing twelve months is around 0.87%, less than VNQ's 3.57% yield.

PositionTTM20252024202320222021202020192018201720162015
IWM
iShares Russell 2000 ETF		0.87%1.04%1.15%1.35%1.48%0.94%1.04%1.26%1.40%1.26%1.38%1.54%
VNQ
Vanguard Real Estate ETF		3.57%3.92%3.85%3.95%3.91%2.56%3.93%3.39%4.74%4.23%4.82%3.92%

Frequently Asked Questions

IWM and VNQ have a correlation of 0.50, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

IWM has higher volatility (7.12%) compared to VNQ (4.74%). In terms of maximum drawdown, IWM dropped -59.05% vs VNQ's -73.07%.

On 10-year performance, IWM leads with 11.14% vs 5.53% for VNQ. On fees, VNQ is cheaper at 0.13% per year. On volatility, VNQ has been the lower-risk option at 4.74%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, IWM has performed better with a 11.14% return vs 5.53%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

VNQ is cheaper with a 0.13% expense ratio, compared with 0.19% for IWM.

VNQ has the higher dividend yield at 3.57%, compared with 0.87% for IWM.

IWM is categorized as Small Cap Blend Equities, while VNQ is REIT. IWM tracks Russell 2000 Index, while VNQ tracks MSCI US Investable Market Real Estate 25/50 Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.19% for IWM and 0.13% for VNQ.

IWM currently has the higher Sharpe Ratio (1.91 vs 0.92), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.

Portfolio Optimizer

Find the right allocation for IWM and VNQ

Add both to a portfolio and optimize allocations for your target — whether that's maximizing returns, minimizing drawdowns, or balancing risk across holdings.

Open Portfolio Optimizer