PFF vs. VNQ

Last updated Jun 13, 2026

PFF (iShares Preferred and Income Securities ETF) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - PFF is a Preferred Stock/Convertible Bonds fund tracking the ICE Exchange-Listed Preferred & Hybrid Securities 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, PFF returned 3.35%/yr vs 5.65%/yr for VNQ. At a 0.49 correlation, their price movements are largely independent. PFF charges 0.46%/yr vs 0.13%/yr for VNQ.

Performance

PFF vs. VNQ - Performance Comparison

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

Returns By Period

In the year-to-date period, PFF achieves a 2.40% return, which is significantly lower than VNQ's 12.51% return. Over the past 10 years, PFF has underperformed VNQ with an annualized return of 3.35%, while VNQ has yielded a comparatively higher 5.65% annualized return.

PFF

• 1D: 0.16%
• 1M: -1.18%
• YTD: 2.40%
• 6M: 2.42%
• 1Y: 8.18%
• 3Y*: 6.77%
• 5Y*: 1.32%
• 10Y*: 3.35%

VNQ

• 1D: 0.92%
• 1M: 2.73%
• YTD: 12.51%
• 6M: 12.32%
• 1Y: 12.92%
• 3Y*: 10.14%
• 5Y*: 2.55%
• 10Y*: 5.65%

*Multi-year figures are annualized to reflect compound growth (CAGR)

PFF vs. VNQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
PFF iShares Preferred and Income Securities ETF	2.40%	4.87%	7.24%	9.22%	-18.19%	7.15%	7.89%	15.93%	-4.64%	8.10%
VNQ Vanguard Real Estate ETF	12.51%	3.24%	4.81%	11.85%	-26.25%	40.54%	-4.61%	28.91%	-6.03%	4.90%

Correlation

The correlation between PFF and VNQ is 0.44, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.44
Correlation (3Y) Calculated over the trailing 3-year period	0.53
Correlation (5Y) Calculated over the trailing 5-year period	0.58
Correlation (10Y) Calculated over the trailing 10-year period	0.53
Correlation (All Time) Calculated using the full available price history since Mar 30, 2007	0.49

The correlation between PFF and VNQ shifts across timeframes, from 0.44 (1 year) to 0.58 (5 years), reflecting how their relationship changes across market environments.

PFF vs. VNQ - Sectors Allocation Comparison

Sectors	PFF	VNQ
Financial Services	51.6%	0.1%
Real Estate	10.5%	97.3%
Utilities	8.7%	-
Industrials	5.6%	0.0%
Technology	4.9%	0.3%
Communication Services	3.4%	0.6%
Basic Materials	1.6%	1.1%
Healthcare	1.4%	-
Consumer Cyclical	1.3%	-
Consumer Defensive	1.2%	-
Energy	0.4%	0.1%

Return for Risk

PFF vs. VNQ — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

PFF

PFF Risk / Return Rank: 36
PFF Sharpe Ratio Rank: 38
PFF Sortino Ratio Rank: 37
PFF Omega Ratio Rank: 35
PFF Calmar Ratio Rank: 36
PFF Martin Ratio Rank: 35

VNQ

VNQ Risk / Return Rank: 32
VNQ Sharpe Ratio Rank: 30
VNQ Sortino Ratio Rank: 28
VNQ Omega Ratio Rank: 28
VNQ Calmar Ratio Rank: 35
VNQ Martin Ratio Rank: 36

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.

PFF vs. VNQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Preferred and Income Securities ETF (PFF) 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.

	PFF	VNQ	Difference
Sharpe ratio: Return per unit of total volatility	1.19	0.96	+0.24
Sortino ratio: Return per unit of downside risk	1.72	1.39	+0.33
Omega ratio: Gain probability vs. loss probability	1.21	1.17	+0.03
Calmar ratio: Return relative to maximum drawdown	1.56	1.56	0.00
Martin ratio: Return relative to average drawdown	4.75	4.90	-0.15

PFF vs. VNQ - Sharpe Ratio Comparison

The current PFF Sharpe Ratio is 1.19, which is comparable to the VNQ Sharpe Ratio of 0.96. The chart below compares the historical Sharpe Ratios of PFF 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.

Drawdowns

PFF vs. VNQ - Drawdown Comparison

The maximum PFF drawdown since its inception was -65.55%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for PFF and VNQ.

Drawdown Indicators

	PFF	VNQ	Difference
Max Drawdown Largest peak-to-trough decline	-65.55%	-73.07%	+7.52%
Max Drawdown (1Y) Largest decline over 1 year	-5.28%	-8.34%	+3.06%
Max Drawdown (3Y) Largest decline over 3 years	-10.63%	-17.46%	+6.83%
Max Drawdown (5Y) Largest decline over 5 years	-21.05%	-34.48%	+13.43%
Max Drawdown (10Y) Largest decline over 10 years	-34.10%	-42.40%	+8.30%
Current Drawdown Current decline from peak	-1.62%	0.00%	-1.62%
Average Drawdown Average peak-to-trough decline	-5.76%	-13.61%	+7.85%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.73%	2.65%	-0.92%

Volatility

PFF vs. VNQ - Volatility Comparison

The current volatility for iShares Preferred and Income Securities ETF (PFF) is 2.29%, while Vanguard Real Estate ETF (VNQ) has a volatility of 4.72%. This indicates that PFF experiences smaller price fluctuations and is considered to be less risky than VNQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PFF	VNQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.29%	4.72%	-2.43%
Volatility (6M) Calculated over the trailing 6-month period	5.21%	9.77%	-4.56%
Volatility (1Y) Calculated over the trailing 1-year period	6.88%	13.54%	-6.66%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	10.32%	18.84%	-8.52%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	12.67%	20.72%	-8.05%

PFF vs. VNQ - Expense Ratio Comparison

PFF has a 0.46% expense ratio, which is higher than VNQ's 0.13% expense ratio.

Dividends

PFF vs. VNQ - Dividend Comparison

PFF's dividend yield for the trailing twelve months is around 5.50%, more than VNQ's 3.54% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PFF iShares Preferred and Income Securities ETF	5.50%	6.30%	6.32%	6.63%	6.01%	4.45%	4.79%	5.31%	6.32%	5.59%	5.85%	5.76%
VNQ Vanguard Real Estate ETF	3.54%	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

Can I hold both PFF and VNQ in my portfolio?

PFF and VNQ have a correlation of 0.44, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PFF or VNQ?

VNQ has higher volatility (4.72%) compared to PFF (2.29%). In terms of maximum drawdown, PFF dropped -65.55% vs VNQ's -73.07%.

Which ETF is better, PFF or VNQ?

On 10-year performance, VNQ leads with 5.65% vs 3.35% for PFF. On fees, VNQ is cheaper at 0.13% per year. On volatility, PFF has been the lower-risk option at 2.29%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PFF or VNQ?

Over the 10-year period, VNQ has performed better with a 5.65% return vs 3.35%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PFF or VNQ?

VNQ is cheaper with a 0.13% expense ratio, compared with 0.46% for PFF.

Which ETF pays a higher dividend yield, PFF or VNQ?

PFF has the higher dividend yield at 5.50%, compared with 3.54% for VNQ.

What is the main difference between PFF and VNQ?

PFF is categorized as Preferred Stock/Convertible Bonds, while VNQ is REIT. PFF tracks ICE Exchange-Listed Preferred & Hybrid Securities 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: 0.46% for PFF and 0.13% for VNQ.

Which has better risk-adjusted returns?

PFF currently has the higher Sharpe Ratio (1.19 vs 0.96), 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.