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SHY vs. VNQ
Performance
Return for Risk
Drawdowns
Volatility
Dividends

SHY vs. VNQ

Last updated Jun 3, 2026

SHY (iShares 1-3 Year Treasury Bond ETF) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - SHY is a Government Bonds fund tracking the ICE US Treasury 1-3 Year 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, SHY returned 1.65%/yr vs 5.22%/yr for VNQ. At a correlation of -0.02, they often move in opposite directions. SHY charges 0.15%/yr vs 0.13%/yr for VNQ.

Performance

SHY vs. VNQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares 1-3 Year Treasury Bond ETF (SHY) and Vanguard Real Estate ETF (VNQ). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, SHY achieves a 0.48% return, which is significantly lower than VNQ's 7.96% return. Over the past 10 years, SHY has underperformed VNQ with an annualized return of 1.65%, while VNQ has yielded a comparatively higher 5.22% annualized return.

SHY

1D
0.00%
1M
0.00%
YTD
0.48%
6M
0.80%
1Y
3.34%
3Y*
4.04%
5Y*
1.73%
10Y*
1.65%

VNQ

1D
0.46%
1M
-1.60%
YTD
7.96%
6M
7.15%
1Y
9.88%
3Y*
9.19%
5Y*
2.21%
10Y*
5.22%
*Multi-year figures are annualized to reflect compound growth (CAGR)

SHY vs. VNQ - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
SHY
iShares 1-3 Year Treasury Bond ETF		0.48%4.95%3.92%4.16%-3.88%-0.71%3.03%3.38%1.46%0.26%
VNQ
Vanguard Real Estate ETF		7.96%3.24%4.81%11.85%-26.25%40.54%-4.61%28.91%-6.03%4.90%

Correlation

The correlation between SHY and VNQ is 0.38, which is low. Their price movements are largely independent, making them effective diversification partners.

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

0.38

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

0.32

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

0.27

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

0.18

Correlation (All Time)
Calculated using the full available price history since Sep 30, 2004

-0.02

The correlation between SHY and VNQ shifts across timeframes, from -0.02 (all time) to 0.38 (1 year), reflecting how their relationship changes across market environments.

Compare stocks, funds, or ETFs

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

iShares 1-3 Year Treasury Bond ETF

Vanguard Real Estate ETF

Often compared with SHY:
SHY vs. SGOVSHY vs. VGSHSHY vs. SHVSHY vs. TLTSHY vs. IEFSHY vs. BILSHY vs. BSV
Often compared with VNQ:
VNQ vs. SCHHVNQ vs. VOOVNQ vs. SPYVNQ vs. XLREVNQ vs. VNQIVNQ vs. SCHDVNQ vs. REET

Return for Risk

SHY vs. VNQ — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
SHY
SHY Risk / Return Rank: 7979
Overall Rank
SHY Sharpe Ratio Rank: 7676
Sharpe Ratio Rank
SHY Sortino Ratio Rank: 8989
Sortino Ratio Rank
SHY Omega Ratio Rank: 8484
Omega Ratio Rank
SHY Calmar Ratio Rank: 7272
Calmar Ratio Rank
SHY Martin Ratio Rank: 7676
Martin Ratio Rank
VNQ
VNQ Risk / Return Rank: 2323
Overall Rank
VNQ Sharpe Ratio Rank: 2222
Sharpe Ratio Rank
VNQ Sortino Ratio Rank: 2121
Sortino Ratio Rank
VNQ Omega Ratio Rank: 2121
Omega Ratio Rank
VNQ Calmar Ratio Rank: 2525
Calmar Ratio Rank
VNQ Martin Ratio Rank: 2727
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.

SHY vs. VNQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares 1-3 Year Treasury Bond ETF (SHY) 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.

SHYVNQDifference

Sharpe ratio

Return per unit of total volatility

2.51

0.75

+1.75

Sortino ratio

Return per unit of downside risk

4.14

1.11

+3.03

Omega ratio

Gain probability vs. loss probability

1.51

1.14

+0.38

Calmar ratio

Return relative to maximum drawdown

3.67

1.20

+2.46

Martin ratio

Return relative to average drawdown

14.96

3.80

+11.16

Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

SHY vs. VNQ - Sharpe Ratio Comparison

The current SHY Sharpe Ratio is 2.51, which is higher than the VNQ Sharpe Ratio of 0.75. The chart below compares the historical Sharpe Ratios of SHY 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.

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Sharpe Ratios by Period

SHYVNQDifference

Sharpe Ratio (1Y)

Calculated over the trailing 1-year period

2.51

0.75

+1.75

Sharpe Ratio (5Y)

Calculated over the trailing 5-year period

0.88

0.12

+0.76

Sharpe Ratio (10Y)

Calculated over the trailing 10-year period

1.06

0.25

+0.81

Sharpe Ratio (All Time)

Calculated using the full available price history

1.29

0.26

+1.02

Drawdowns

SHY vs. VNQ - Drawdown Comparison

The maximum SHY drawdown since its inception was -5.71%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for SHY and VNQ.

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Drawdown Indicators

SHYVNQDifference

Max Drawdown

Largest peak-to-trough decline

-5.71%

-73.07%

+67.36%

Max Drawdown (1Y)

Largest decline over 1 year

-0.89%

-8.34%

+7.45%

Max Drawdown (3Y)

Largest decline over 3 years

-0.97%

-17.46%

+16.49%

Max Drawdown (5Y)

Largest decline over 5 years

-5.71%

-34.48%

+28.77%

Max Drawdown (10Y)

Largest decline over 10 years

-5.71%

-42.40%

+36.69%

Current Drawdown

Current decline from peak

-0.26%

-3.64%

+3.38%

Average Drawdown

Average peak-to-trough decline

-0.52%

-13.63%

+13.11%

Ulcer Index

Depth and duration of drawdowns from previous peaks

0.22%

2.64%

-2.42%

Volatility

SHY vs. VNQ - Volatility Comparison

The current volatility for iShares 1-3 Year Treasury Bond ETF (SHY) is 0.37%, while Vanguard Real Estate ETF (VNQ) has a volatility of 3.77%. This indicates that SHY 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.

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Volatility by Period

SHYVNQDifference

Volatility (1M)

Calculated over the trailing 1-month period

0.37%

3.77%

-3.40%

Volatility (6M)

Calculated over the trailing 6-month period

0.93%

9.33%

-8.40%

Volatility (1Y)

Calculated over the trailing 1-year period

1.34%

13.16%

-11.82%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

1.98%

18.80%

-16.82%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

1.57%

20.70%

-19.13%

SHY vs. VNQ - Expense Ratio Comparison

SHY has a 0.15% 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

SHY vs. VNQ - Dividend Comparison

SHY's dividend yield for the trailing twelve months is around 3.68%, which matches VNQ's 3.69% yield.

PositionTTM20252024202320222021202020192018201720162015
SHY
iShares 1-3 Year Treasury Bond ETF		3.68%3.81%3.92%2.99%1.30%0.26%0.94%2.12%1.72%0.98%0.71%0.54%
VNQ
Vanguard Real Estate ETF		3.69%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

SHY and VNQ have a correlation of 0.38, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

VNQ has higher volatility (3.77%) compared to SHY (0.37%). In terms of maximum drawdown, SHY dropped -5.71% vs VNQ's -73.07%.

On 10-year performance, VNQ leads with 5.22% vs 1.65% for SHY. On fees, VNQ is cheaper at 0.13% per year. On volatility, SHY has been the lower-risk option at 0.37%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, VNQ has performed better with a 5.22% return vs 1.65%. 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 0.15% for SHY.

VNQ has the higher dividend yield at 3.69%, compared with 3.68% for SHY.

SHY is categorized as Government Bonds, while VNQ is REIT. SHY tracks ICE US Treasury 1-3 Year 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: 0.15% for SHY and 0.13% for VNQ.

SHY currently has the higher Sharpe Ratio (2.51 vs 0.75), 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.

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