VNQ vs. XLRE
VNQ (Vanguard Real Estate ETF) and XLRE (Real Estate Select Sector SPDR Fund) are both REIT funds - VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index while XLRE tracks the Real Estate Select Sector Index. Both are passively managed. Over the past 10 years, VNQ returned 5.44%/yr vs 6.92%/yr for XLRE. With a 0.97 correlation, they move nearly in lockstep. Both charge a 0.13% expense ratio.
Performance
VNQ vs. XLRE - Performance Comparison
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Returns By Period
The year-to-date returns for both investments are quite close, with VNQ having a 11.77% return and XLRE slightly higher at 12.35%. Over the past 10 years, VNQ has underperformed XLRE with an annualized return of 5.44%, while XLRE has yielded a comparatively higher 6.92% annualized return.
VNQ
- 1D
- 1.31%
- 1M
- 1.13%
- YTD
- 11.77%
- 6M
- 12.16%
- 1Y
- 11.59%
- 3Y*
- 11.30%
- 5Y*
- 2.83%
- 10Y*
- 5.44%
XLRE
- 1D
- 1.41%
- 1M
- 1.06%
- YTD
- 12.35%
- 6M
- 12.83%
- 1Y
- 9.79%
- 3Y*
- 11.31%
- 5Y*
- 3.53%
- 10Y*
- 6.92%
VNQ vs. XLRE - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VNQ Vanguard Real Estate ETF | 11.77% | 3.24% | 4.81% | 11.85% | -26.25% | 40.54% | -4.61% | 28.91% | -6.03% | 4.90% |
XLRE Real Estate Select Sector SPDR Fund | 12.35% | 2.63% | 5.09% | 12.36% | -26.25% | 46.10% | -2.18% | 28.68% | -2.39% | 10.69% |
Correlation
The correlation between VNQ and XLRE is 0.98 - 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 | 0.98 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.99 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.99 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.98 |
Correlation (All Time) Calculated using the full available price history since Oct 8, 2015 | 0.97 |
The correlation between VNQ and XLRE has been stable across timeframes, ranging from 0.97 to 0.99 - a consistent structural relationship.
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Return for Risk
VNQ vs. XLRE — Risk / Return Rank
VNQ
XLRE
VNQ vs. XLRE - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Real Estate ETF (VNQ) and Real Estate Select Sector SPDR Fund (XLRE). 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.
| VNQ | XLRE | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.15 | ||
| Sortino ratioReturn per unit of downside risk | +0.21 | ||
| Omega ratioGain probability vs. loss probability | 1.15 | 1.13 | +0.02 |
| Calmar ratioReturn relative to maximum drawdown | 1.40 | 1.18 | +0.22 |
| Martin ratioReturn relative to average drawdown | 4.37 | 3.23 | +1.14 |
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Drawdowns
VNQ vs. XLRE - Drawdown Comparison
The maximum VNQ drawdown since its inception was -73.07%, which is greater than XLRE's maximum drawdown of -38.83%. Use the drawdown chart below to compare losses from any high point for VNQ and XLRE.
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Drawdown Indicators
| VNQ | XLRE | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -73.07% | -38.83% | -34.24% |
Max Drawdown (1Y)Largest decline over 1 year | -8.34% | -8.33% | -0.01% |
Max Drawdown (3Y)Largest decline over 3 years | -17.46% | -16.74% | -0.72% |
Max Drawdown (5Y)Largest decline over 5 years | -34.48% | -34.12% | -0.36% |
Max Drawdown (10Y)Largest decline over 10 years | -42.40% | -38.83% | -3.57% |
Current DrawdownCurrent decline from peak | -0.66% | -0.72% | +0.06% |
Average DrawdownAverage peak-to-trough decline | -13.60% | -9.56% | -4.04% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 2.66% | 3.04% | -0.38% |
Volatility
VNQ vs. XLRE - Volatility Comparison
Vanguard Real Estate ETF (VNQ) and Real Estate Select Sector SPDR Fund (XLRE) have volatilities of 5.19% and 5.35%, 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.
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Volatility by Period
| VNQ | XLRE | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 5.19% | 5.35% | -0.16% |
Volatility (6M)Calculated over the trailing 6-month period | 10.20% | 10.63% | -0.43% |
Volatility (1Y)Calculated over the trailing 1-year period | 13.84% | 14.17% | -0.33% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 18.86% | 19.13% | -0.27% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 20.75% | 20.45% | +0.30% |
VNQ vs. XLRE - Expense Ratio Comparison
Both VNQ and XLRE have an expense ratio of 0.13%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
VNQ vs. XLRE - Dividend Comparison
VNQ's dividend yield for the trailing twelve months is around 3.56%, more than XLRE's 3.15% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VNQ Vanguard Real Estate ETF | 3.56% | 3.92% | 3.85% | 3.95% | 3.91% | 2.56% | 3.93% | 3.39% | 4.74% | 4.23% | 4.82% | 3.92% |
XLRE Real Estate Select Sector SPDR Fund | 3.15% | 3.45% | 3.43% | 3.31% | 3.70% | 2.61% | 3.15% | 3.06% | 3.78% | 3.25% | 4.22% | 1.09% |
Frequently Asked Questions
With a correlation of 0.98, VNQ and XLRE 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.
XLRE has higher volatility (5.35%) compared to VNQ (5.19%). In terms of maximum drawdown, VNQ dropped -73.07% vs XLRE's -38.83%.
On 10-year performance, XLRE leads with 6.92% vs 5.44% for VNQ. Both ETFs have the same 0.13% expense ratio. On volatility, VNQ has been the lower-risk option at 5.19%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, XLRE has performed better with a 6.92% return vs 5.44%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VNQ and XLRE have the same expense ratio: 0.13% per year.
VNQ has the higher dividend yield at 3.56%, compared with 3.15% for XLRE.
VNQ tracks MSCI US Investable Market Real Estate 25/50 Index, while XLRE tracks Real Estate Select Sector Index. They also come from different issuers: Vanguard and State Street.
VNQ currently has the higher Sharpe Ratio (0.85 vs 0.70), 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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