VNQ vs. FREL

Last updated Jun 3, 2026

VNQ (Vanguard Real Estate ETF) and FREL (Fidelity MSCI Real Estate Index ETF) are both REIT funds - VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index while FREL tracks the MSCI USA IMI Real Estate Index. Both are passively managed. Over the past 10 years, VNQ returned 5.22%/yr vs 5.69%/yr for FREL. With a 0.99 correlation, they move nearly in lockstep. VNQ charges 0.13%/yr vs 0.08%/yr for FREL.

Performance

VNQ vs. FREL - Performance Comparison

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

Returns By Period

The year-to-date returns for both stocks are quite close, with VNQ having a 7.96% return and FREL slightly lower at 7.74%. Over the past 10 years, VNQ has underperformed FREL with an annualized return of 5.22%, while FREL has yielded a comparatively higher 5.69% annualized return.

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%

FREL

• 1D: 0.42%
• 1M: -1.51%
• YTD: 7.74%
• 6M: 6.90%
• 1Y: 9.68%
• 3Y*: 9.10%
• 5Y*: 2.11%
• 10Y*: 5.69%

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

VNQ vs. FREL - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
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%
FREL Fidelity MSCI Real Estate Index ETF	7.74%	3.09%	5.05%	11.74%	-26.21%	40.46%	-4.99%	28.78%	-4.52%	8.86%

Correlation

The correlation between VNQ and FREL is 1.00 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	1.00
Correlation (3Y) Calculated over the trailing 3-year period	1.00
Correlation (5Y) Calculated over the trailing 5-year period	1.00
Correlation (10Y) Calculated over the trailing 10-year period	0.99
Correlation (All Time) Calculated using the full available price history since Feb 6, 2015	0.99

The correlation between VNQ and FREL has been stable across timeframes, ranging from 0.99 to 1.00 - a consistent structural relationship.

VNQ vs. FREL - Sectors Allocation Comparison

Sectors	VNQ	FREL
Real Estate	97.3%	97.6%
Basic Materials	1.1%	1.2%
Communication Services	0.6%	0.4%
Technology	0.3%	0.3%
Energy	0.1%	0.1%
Financial Services	0.1%	0.0%
Industrials	0.0%	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Healthcare	-	-
Utilities	-	-

Return for Risk

VNQ vs. FREL — 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: 21
VNQ Calmar Ratio Rank: 25
VNQ Martin Ratio Rank: 27

FREL

FREL Risk / Return Rank: 23
FREL Sharpe Ratio Rank: 22
FREL Sortino Ratio Rank: 21
FREL Omega Ratio Rank: 21
FREL Calmar Ratio Rank: 24
FREL Martin Ratio Rank: 26

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. FREL - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Real Estate ETF (VNQ) and Fidelity MSCI Real Estate Index ETF (FREL). 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	FREL	Difference
Sharpe ratio Return per unit of total volatility	0.75	0.74	+0.02
Sortino ratio Return per unit of downside risk	1.11	1.08	+0.02
Omega ratio Gain probability vs. loss probability	1.14	1.14	0.00
Calmar ratio Return relative to maximum drawdown	1.20	1.16	+0.04
Martin ratio Return relative to average drawdown	3.80	3.68	+0.12
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. FREL - Sharpe Ratio Comparison

The current VNQ Sharpe Ratio is 0.75, which is comparable to the FREL Sharpe Ratio of 0.74. The chart below compares the historical Sharpe Ratios of VNQ and FREL, 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	FREL	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.75	0.74	+0.02
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.12	0.11	+0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.25	0.28	-0.02
Sharpe Ratio (All Time) Calculated using the full available price history	0.26	0.26	+0.01

Drawdowns

VNQ vs. FREL - Drawdown Comparison

The maximum VNQ drawdown since its inception was -73.07%, which is greater than FREL's maximum drawdown of -42.61%. Use the drawdown chart below to compare losses from any high point for VNQ and FREL.

Drawdown Indicators

	VNQ	FREL	Difference
Max Drawdown Largest peak-to-trough decline	-73.07%	-42.61%	-30.46%
Max Drawdown (1Y) Largest decline over 1 year	-8.34%	-8.45%	+0.11%
Max Drawdown (3Y) Largest decline over 3 years	-17.46%	-17.54%	+0.08%
Max Drawdown (5Y) Largest decline over 5 years	-34.48%	-34.40%	-0.08%
Max Drawdown (10Y) Largest decline over 10 years	-42.40%	-42.61%	+0.21%
Current Drawdown Current decline from peak	-3.64%	-3.80%	+0.16%
Average Drawdown Average peak-to-trough decline	-13.63%	-9.95%	-3.68%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.64%	2.67%	-0.03%

Volatility

VNQ vs. FREL - Volatility Comparison

Vanguard Real Estate ETF (VNQ) and Fidelity MSCI Real Estate Index ETF (FREL) have volatilities of 3.77% and 3.80%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VNQ	FREL	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.77%	3.80%	-0.03%
Volatility (6M) Calculated over the trailing 6-month period	9.33%	9.35%	-0.02%
Volatility (1Y) Calculated over the trailing 1-year period	13.16%	13.17%	-0.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.80%	18.85%	-0.05%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.70%	20.68%	+0.02%

VNQ vs. FREL - Expense Ratio Comparison

VNQ has a 0.13% expense ratio, which is higher than FREL's 0.08% 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

VNQ vs. FREL - Dividend Comparison

VNQ's dividend yield for the trailing twelve months is around 3.69%, more than FREL's 3.34% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FREL Fidelity MSCI Real Estate Index ETF	3.34%	3.59%	3.48%	3.73%	3.57%	2.34%	3.77%	3.32%	5.54%	3.27%	4.01%	3.80%
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 FREL in my portfolio?

With a correlation of 1.00, VNQ and FREL move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VNQ or FREL?

FREL has higher volatility (3.80%) compared to VNQ (3.77%). In terms of maximum drawdown, VNQ dropped -73.07% vs FREL's -42.61%.

Which ETF is better, VNQ or FREL?

On 10-year performance, FREL leads with 5.69% vs 5.22% for VNQ. On fees, FREL is cheaper at 0.08% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VNQ or FREL?

Over the 10-year period, FREL has performed better with a 5.69% return vs 5.22%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VNQ or FREL?

FREL is cheaper with a 0.08% expense ratio, compared with 0.13% for VNQ.

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

VNQ has the higher dividend yield at 3.69%, compared with 3.34% for FREL.

What is the main difference between VNQ and FREL?

VNQ tracks MSCI US Investable Market Real Estate 25/50 Index, while FREL tracks MSCI USA IMI Real Estate Index. They also come from different issuers: Vanguard and Fidelity. Their fees differ too: 0.13% for VNQ and 0.08% for FREL.

Which has better risk-adjusted returns?

VNQ currently has the higher Sharpe Ratio (0.75 vs 0.74), 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.