XLRE vs. VNQ
XLRE (Real Estate Select Sector SPDR Fund) and VNQ (Vanguard Real Estate ETF) are both REIT funds - XLRE tracks the Real Estate Select Sector Index while VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index. Both are passively managed. Over the past 10 years, XLRE returned 6.92%/yr vs 5.44%/yr for VNQ. With a 0.97 correlation, they move nearly in lockstep. Both charge a 0.13% expense ratio.
Performance
XLRE vs. VNQ - Performance Comparison
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Returns By Period
The year-to-date returns for both stocks are quite close, with XLRE having a 12.35% return and VNQ slightly lower at 11.77%. Over the past 10 years, XLRE has outperformed VNQ with an annualized return of 6.92%, while VNQ has yielded a comparatively lower 5.44% annualized return.
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
- 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 vs. VNQ - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
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% |
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% |
Correlation
The correlation between XLRE and VNQ 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 XLRE and VNQ has been stable across timeframes, ranging from 0.97 to 0.99 - a consistent structural relationship.
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Return for Risk
XLRE vs. VNQ — Risk / Return Rank
XLRE
VNQ
XLRE vs. VNQ - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Real Estate Select Sector SPDR Fund (XLRE) 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.
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.
| XLRE | VNQ | 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 | 1.13 | 1.15 | -0.02 |
| Calmar ratioReturn relative to maximum drawdown | 1.18 | 1.40 | -0.22 |
| Martin ratioReturn relative to average drawdown | 3.23 | 4.37 | -1.14 |
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Drawdowns
XLRE vs. VNQ - Drawdown Comparison
The maximum XLRE drawdown since its inception was -38.83%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for XLRE and VNQ.
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Drawdown Indicators
| XLRE | VNQ | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -38.83% | -73.07% | +34.24% |
Max Drawdown (1Y)Largest decline over 1 year | -8.33% | -8.34% | +0.01% |
Max Drawdown (3Y)Largest decline over 3 years | -16.74% | -17.46% | +0.72% |
Max Drawdown (5Y)Largest decline over 5 years | -34.12% | -34.48% | +0.36% |
Max Drawdown (10Y)Largest decline over 10 years | -38.83% | -42.40% | +3.57% |
Current DrawdownCurrent decline from peak | -0.72% | -0.66% | -0.06% |
Average DrawdownAverage peak-to-trough decline | -9.56% | -13.60% | +4.04% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 3.04% | 2.66% | +0.38% |
Volatility
XLRE vs. VNQ - Volatility Comparison
Real Estate Select Sector SPDR Fund (XLRE) and Vanguard Real Estate ETF (VNQ) have volatilities of 5.35% and 5.19%, 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
| XLRE | VNQ | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 5.35% | 5.19% | +0.16% |
Volatility (6M)Calculated over the trailing 6-month period | 10.63% | 10.20% | +0.43% |
Volatility (1Y)Calculated over the trailing 1-year period | 14.17% | 13.84% | +0.33% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 19.13% | 18.86% | +0.27% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 20.45% | 20.75% | -0.30% |
XLRE vs. VNQ - Expense Ratio Comparison
Both XLRE and VNQ 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
XLRE vs. VNQ - Dividend Comparison
XLRE's dividend yield for the trailing twelve months is around 3.15%, less than VNQ's 3.56% 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, XLRE and VNQ 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, XLRE dropped -38.83% vs VNQ's -73.07%.
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.
XLRE and VNQ have the same expense ratio: 0.13% per year.
VNQ has the higher dividend yield at 3.56%, compared with 3.15% for XLRE.
XLRE tracks Real Estate Select Sector Index, while VNQ tracks MSCI US Investable Market Real Estate 25/50 Index. They also come from different issuers: State Street and Vanguard.
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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