VWO vs. VNQ

Last updated Jun 4, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging 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, VWO returned 8.85%/yr vs 5.21%/yr for VNQ. A 0.51 correlation means they provide meaningful diversification when combined. VWO charges 0.08%/yr vs 0.13%/yr for VNQ.

Performance

VWO vs. VNQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Emerging Markets ETF (VWO) 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, VWO achieves a 12.22% return, which is significantly higher than VNQ's 7.83% return. Over the past 10 years, VWO has outperformed VNQ with an annualized return of 8.85%, while VNQ has yielded a comparatively lower 5.21% annualized return.

VWO

• 1D: -1.41%
• 1M: 2.72%
• YTD: 12.22%
• 6M: 13.79%
• 1Y: 30.72%
• 3Y*: 18.02%
• 5Y*: 5.17%
• 10Y*: 8.85%

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%

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

VWO vs. VNQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWO Vanguard FTSE Emerging Markets ETF	12.22%	25.60%	10.59%	9.25%	-17.98%	1.26%	15.17%	20.75%	-14.76%	31.49%
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%

Correlation

The correlation between VWO and VNQ is 0.32, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.32
Correlation (3Y) Calculated over the trailing 3-year period	0.38
Correlation (5Y) Calculated over the trailing 5-year period	0.42
Correlation (10Y) Calculated over the trailing 10-year period	0.39
Correlation (All Time) Calculated using the full available price history since Mar 11, 2005	0.51

The correlation between VWO and VNQ shifts across timeframes, from 0.32 (1 year) to 0.51 (all time), reflecting how their relationship changes across market environments.

VWO vs. VNQ - Sectors Allocation Comparison

Sectors	VWO	VNQ
Technology	29.6%	0.3%
Financial Services	19.5%	0.1%
Consumer Cyclical	10.7%	-
Industrials	8.0%	0.0%
Basic Materials	8.0%	1.1%
Communication Services	7.1%	0.6%
Energy	4.6%	0.1%
Healthcare	3.9%	-
Consumer Defensive	3.7%	-
Utilities	2.9%	-
Real Estate	2.2%	97.3%

Return for Risk

VWO vs. VNQ — Risk / Return Rank

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

VWO

VWO Risk / Return Rank: 56
VWO Sharpe Ratio Rank: 56
VWO Sortino Ratio Rank: 55
VWO Omega Ratio Rank: 57
VWO Calmar Ratio Rank: 54
VWO Martin Ratio Rank: 56

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

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.

VWO vs. VNQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) 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.

	VWO	VNQ	Difference
Sharpe ratio Return per unit of total volatility	1.94	0.76	+1.18
Sortino ratio Return per unit of downside risk	2.69	1.12	+1.58
Omega ratio Gain probability vs. loss probability	1.36	1.14	+0.22
Calmar ratio Return relative to maximum drawdown	2.76	1.20	+1.56
Martin ratio Return relative to average drawdown	9.96	3.78	+6.18
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VWO vs. VNQ - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.94, which is higher than the VNQ Sharpe Ratio of 0.76. The chart below compares the historical Sharpe Ratios of VWO 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.

Sharpe Ratios by Period

	VWO	VNQ	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.94	0.76	+1.18
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	0.12	+0.18
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.46	0.25	+0.21
Sharpe Ratio (All Time) Calculated using the full available price history	0.27	0.26	0.00

Drawdowns

VWO vs. VNQ - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for VWO and VNQ.

Drawdown Indicators

	VWO	VNQ	Difference
Max Drawdown Largest peak-to-trough decline	-67.68%	-73.07%	+5.39%
Max Drawdown (1Y) Largest decline over 1 year	-11.17%	-8.34%	-2.83%
Max Drawdown (3Y) Largest decline over 3 years	-17.37%	-17.46%	+0.09%
Max Drawdown (5Y) Largest decline over 5 years	-32.64%	-34.48%	+1.84%
Max Drawdown (10Y) Largest decline over 10 years	-36.39%	-42.40%	+6.01%
Current Drawdown Current decline from peak	-1.41%	-3.75%	+2.34%
Average Drawdown Average peak-to-trough decline	-15.82%	-13.63%	-2.19%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.09%	2.64%	+0.45%

Volatility

VWO vs. VNQ - Volatility Comparison

Vanguard FTSE Emerging Markets ETF (VWO) has a higher volatility of 5.61% compared to Vanguard Real Estate ETF (VNQ) at 3.72%. This indicates that VWO's price experiences larger fluctuations and is considered to be riskier than VNQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VWO	VNQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.61%	3.72%	+1.89%
Volatility (6M) Calculated over the trailing 6-month period	13.22%	9.26%	+3.96%
Volatility (1Y) Calculated over the trailing 1-year period	15.89%	13.16%	+2.73%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.37%	18.80%	-1.43%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.20%	20.70%	-1.50%

VWO vs. VNQ - Expense Ratio Comparison

VWO has a 0.08% expense ratio, which is lower than VNQ's 0.13% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VWO vs. VNQ - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.40%, less than VNQ's 3.69% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VWO Vanguard FTSE Emerging Markets ETF	2.40%	2.79%	3.20%	3.52%	4.11%	2.63%	1.91%	3.23%	2.88%	2.30%	2.52%	3.26%

Frequently Asked Questions

Can I hold both VWO and VNQ in my portfolio?

VWO and VNQ have a correlation of 0.32, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VWO or VNQ?

VWO has higher volatility (5.61%) compared to VNQ (3.72%). In terms of maximum drawdown, VWO dropped -67.68% vs VNQ's -73.07%.

Which ETF is better, VWO or VNQ?

On 10-year performance, VWO leads with 8.85% vs 5.21% for VNQ. On fees, VWO is cheaper at 0.08% 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, VWO or VNQ?

Over the 10-year period, VWO has performed better with a 8.85% return vs 5.21%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VWO or VNQ?

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

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

VNQ has the higher dividend yield at 3.69%, compared with 2.40% for VWO.

What is the main difference between VWO and VNQ?

VWO is categorized as Emerging Markets Equities, while VNQ is REIT. VWO tracks FTSE Emerging Index, while VNQ tracks MSCI US Investable Market Real Estate 25/50 Index. Their fees differ too: 0.08% for VWO and 0.13% for VNQ.

Which has better risk-adjusted returns?

VWO currently has the higher Sharpe Ratio (1.94 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.