VNQ vs. DLS

Last updated Jun 4, 2026

VNQ (Vanguard Real Estate ETF) and DLS (WisdomTree International SmallCap Dividend) are both exchange-traded funds - VNQ is a REIT fund tracking the MSCI US Investable Market Real Estate 25/50 Index, while DLS is a Foreign Small & Mid Cap Equities fund tracking the WisdomTree International SmallCap Dividend Index. Both are passively managed. Over the past 10 years, VNQ returned 5.21%/yr vs 7.46%/yr for DLS. A 0.57 correlation means they provide meaningful diversification when combined. VNQ charges 0.13%/yr vs 0.58%/yr for DLS.

Performance

VNQ vs. DLS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Real Estate ETF (VNQ) and WisdomTree International SmallCap Dividend (DLS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VNQ achieves a 7.83% return, which is significantly higher than DLS's 6.63% return. Over the past 10 years, VNQ has underperformed DLS with an annualized return of 5.21%, while DLS has yielded a comparatively higher 7.46% annualized return.

VNQ

• 1D: -0.12%
• 1M: -1.10%
• YTD: 7.83%
• 6M: 6.75%
• 1Y: 9.97%
• 3Y*: 9.15%
• 5Y*: 2.18%
• 10Y*: 5.21%

DLS

• 1D: -0.94%
• 1M: 0.80%
• YTD: 6.63%
• 6M: 9.37%
• 1Y: 22.56%
• 3Y*: 17.27%
• 5Y*: 6.55%
• 10Y*: 7.46%

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

VNQ vs. DLS - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VNQ Vanguard Real Estate ETF	7.83%	3.24%	4.81%	11.85%	-26.25%	40.54%	-4.61%	28.91%	-6.03%	4.90%
DLS WisdomTree International SmallCap Dividend	6.63%	34.11%	3.06%	15.33%	-17.31%	11.71%	-1.28%	22.20%	-18.95%	31.83%

Correlation

The correlation between VNQ and DLS is 0.52, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.52
Correlation (3Y) Calculated over the trailing 3-year period	0.55
Correlation (5Y) Calculated over the trailing 5-year period	0.59
Correlation (10Y) Calculated over the trailing 10-year period	0.52
Correlation (All Time) Calculated using the full available price history since Jun 19, 2006	0.57

The correlation between VNQ and DLS has been stable across timeframes, ranging from 0.52 to 0.59 - a consistent structural relationship.

VNQ vs. DLS - Sectors Allocation Comparison

Sectors	VNQ	DLS
Real Estate	97.3%	7.8%
Basic Materials	1.1%	8.9%
Communication Services	0.6%	4.4%
Technology	0.3%	8.4%
Energy	0.1%	3.0%
Financial Services	0.1%	13.3%
Industrials	0.0%	27.8%
Consumer Cyclical	-	12.8%
Consumer Defensive	-	7.9%
Healthcare	-	3.7%
Utilities	-	2.1%

Return for Risk

VNQ vs. DLS — Risk / Return Rank

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

VNQ

VNQ Risk / Return Rank: 23
VNQ Sharpe Ratio Rank: 22
VNQ Sortino Ratio Rank: 21
VNQ Omega Ratio Rank: 20
VNQ Calmar Ratio Rank: 25
VNQ Martin Ratio Rank: 27

DLS

DLS Risk / Return Rank: 46
DLS Sharpe Ratio Rank: 48
DLS Sortino Ratio Rank: 48
DLS Omega Ratio Rank: 48
DLS Calmar Ratio Rank: 41
DLS Martin Ratio Rank: 45

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.

VNQ vs. DLS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Real Estate ETF (VNQ) and WisdomTree International SmallCap Dividend (DLS). 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.

	VNQ	DLS	Difference
Sharpe ratio: Return per unit of total volatility	0.76	1.69	-0.93
Sortino ratio: Return per unit of downside risk	1.12	2.41	-1.30
Omega ratio: Gain probability vs. loss probability	1.14	1.31	-0.17
Calmar ratio: Return relative to maximum drawdown	1.20	2.05	-0.85
Martin ratio: Return relative to average drawdown	3.78	7.55	-3.77
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VNQ vs. DLS - Sharpe Ratio Comparison

The current VNQ Sharpe Ratio is 0.76, which is lower than the DLS Sharpe Ratio of 1.69. The chart below compares the historical Sharpe Ratios of VNQ and DLS, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VNQ	DLS	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.76	1.69	-0.93
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.12	0.42	-0.31
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.25	0.45	-0.20
Sharpe Ratio (All Time) Calculated using the full available price history	0.26	0.33	-0.07

Drawdowns

VNQ vs. DLS - Drawdown Comparison

The maximum VNQ drawdown since its inception was -73.07%, which is greater than DLS's maximum drawdown of -63.13%. Use the drawdown chart below to compare losses from any high point for VNQ and DLS.

Drawdown Indicators

	VNQ	DLS	Difference
Max Drawdown Largest peak-to-trough decline	-73.07%	-63.13%	-9.94%
Max Drawdown (1Y) Largest decline over 1 year	-8.34%	-11.04%	+2.70%
Max Drawdown (3Y) Largest decline over 3 years	-17.46%	-12.69%	-4.77%
Max Drawdown (5Y) Largest decline over 5 years	-34.48%	-32.22%	-2.26%
Max Drawdown (10Y) Largest decline over 10 years	-42.40%	-44.77%	+2.37%
Current Drawdown Current decline from peak	-3.75%	-3.20%	-0.55%
Average Drawdown Average peak-to-trough decline	-13.63%	-13.65%	+0.02%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.64%	2.99%	-0.35%

Volatility

VNQ vs. DLS - Volatility Comparison

The current volatility for Vanguard Real Estate ETF (VNQ) is 3.72%, while WisdomTree International SmallCap Dividend (DLS) has a volatility of 4.58%. This indicates that VNQ experiences smaller price fluctuations and is considered to be less risky than DLS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VNQ	DLS	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.72%	4.58%	-0.86%
Volatility (6M) Calculated over the trailing 6-month period	9.26%	10.98%	-1.72%
Volatility (1Y) Calculated over the trailing 1-year period	13.16%	13.44%	-0.28%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.80%	15.57%	+3.23%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.70%	16.67%	+4.03%

VNQ vs. DLS - Expense Ratio Comparison

VNQ has a 0.13% expense ratio, which is lower than DLS's 0.58% expense ratio.

Dividends

VNQ vs. DLS - Dividend Comparison

VNQ's dividend yield for the trailing twelve months is around 3.69%, more than DLS's 3.50% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
DLS WisdomTree International SmallCap Dividend	3.50%	3.87%	4.56%	4.29%	4.96%	3.29%	2.50%	3.37%	3.66%	2.79%	3.29%	2.72%
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

Can I hold both VNQ and DLS in my portfolio?

VNQ and DLS have a correlation of 0.52, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VNQ or DLS?

DLS has higher volatility (4.58%) compared to VNQ (3.72%). In terms of maximum drawdown, VNQ dropped -73.07% vs DLS's -63.13%.

Which ETF is better, VNQ or DLS?

On 10-year performance, DLS leads with 7.46% vs 5.21% for VNQ. On fees, VNQ is cheaper at 0.13% per year. On volatility, VNQ has been the lower-risk option at 3.72%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VNQ or DLS?

Over the 10-year period, DLS has performed better with a 7.46% return vs 5.21%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VNQ or DLS?

VNQ is cheaper with a 0.13% expense ratio, compared with 0.58% for DLS.

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

VNQ has the higher dividend yield at 3.69%, compared with 3.50% for DLS.

What is the main difference between VNQ and DLS?

VNQ is categorized as REIT, while DLS is Foreign Small & Mid Cap Equities. VNQ tracks MSCI US Investable Market Real Estate 25/50 Index, while DLS tracks WisdomTree International SmallCap Dividend Index. They also come from different issuers: Vanguard and WisdomTree. Their fees differ too: 0.13% for VNQ and 0.58% for DLS.

Which has better risk-adjusted returns?

DLS currently has the higher Sharpe Ratio (1.69 vs 0.76), 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.