# How Vanguard Real Estate ETF (VNQ) compares with the whole market and its popular alternatives

> Source: EasyCompare research, https://easycompare.io/research/vnq
> Data as of October 20, 2026. Total returns include reinvested dividends. Past performance does not predict future results; nothing here is investment advice.

Built by QuantCommons' quantitative engine, this page is about relative opportunity, not data on VNQ alone. It places VNQ (Vanguard Real Estate ETF) against 17 popular alternatives, its neighboring categories and the entire market of over 10,000 U.S.-listed stocks and ETFs, and surfaces what has done better on consistent outperformance, return for the risk taken, behavior in real market crashes and diversification. The result is a clearer view of where VNQ stands in the market, and of the alternatives worth a closer look.

Period covered: VNQ's full trading record, from September 2004 through September 2026. The crash tests reach back to 2000 using older funds and the S&P 500. All returns include reinvested dividends. Data as of October 20, 2026.

## Key findings

- **What you're buying:** VNQ is a real estate bet first: 99% of assets, versus 2% in the S&P 500.
- **Right now:** VNQ has gone against the market, falling 3.2% over the past 6 months while the S&P 500 rose 9.1%. Its similar funds were far apart over the past 6 months, from USRT (iShares Core U.S. REIT ETF, down 1.9%) to SRVR (Pacer Data & Infrastructure Real Estate ETF, down 18.7%).
- **Fund or market?:** VNQ fell 6.4% over the past 3 months even as the S&P 500 rose 3.9%.
- **Long term:** Over the past decade, VNQ returned 5.1% a year against 15.5% a year for the S&P 500 (64.1% in total against 321%).
- **In a crash:** In the 2022 bear market, VNQ held up better than SRVR (Pacer Data & Infrastructure Real Estate ETF); only KBWY (Invesco KBW Premium Yield Equity REIT ETF) fell less.
- **Diversification:** Against the S&P 500, VNQ has a correlation of 0.79 over 5 years, more closely than 61% of ETFs with at least $100 million in assets. Next to an index fund it is some diversification, but not a hedge.
- **Better options**
  - **Popular alternatives:** PFF (iShares Preferred and Income Securities ETF) matched VNQ's return over the past 5 years (a loss of 0.2% a year against 0.7% a year) with 45% less volatility.
  - **Nearby categories and themes:** IGF (iShares Global Infrastructure ETF, infrastructure equity) and SPSB (State Street SPDR Portfolio Short Term Corporate Bond ETF, investment grade bonds) earned more than VNQ with less volatility over the past 5 years. IGF returned 9.0% a year at 13.9% volatility, against 0.7% a year at 18.9%.
  - **Versus the S&P 500:** Simply owning the S&P 500 would have done better over the past 5 years: 12.7% a year at 17.1% volatility, against 0.7% at 18.9% for VNQ.

## How much would $10,000 in VNQ have grown?

This chart tracks a hypothetical $10,000 investment in VNQ over the past 20 years, with dividends reinvested, alongside the same amount in the S&P 500, investments that ended ahead of VNQ over the same span and VNQ's popular alternatives, among those that traded for the entire period.

- $10,000 invested in VNQ at the end of September 2006 would have grown to $28,850 by September 2026, less than the $82,294 it would have become in SPY, an S&P 500 fund.
- Five of the eight other investments on the chart ended ahead of VNQ, and VTI finished highest, at $81,413.

## VNQ at a glance

This section summarizes the key facts about the fund, its returns over periods from one to ten years and the risk it has carried, with dividends reinvested throughout.

- VNQ's deepest decline since it began trading in 2004 was 73.1%, from February 2007 to March 2009. It took about four years from the low to climb back to its old high.
- Over 21 full calendar years, VNQ's best was 2021, when it returned 40.5%, and its worst was 2008, when it lost 37.0%. It lost money in five of those years.
- VNQ is 7.8% below its all-time high.

- Type: ETF, Real Estate (Asset Management)
- Trading since: September 29, 2004
- Assets: $66B
- Expense ratio: 0.13%
- Volatility (5 years): 18.9%; Sharpe ratio: 0.13
- Worst decline ever: −73.1%, from February 7, 2007 to March 6, 2009; back at its high by September 7, 2012

| Period | VNQ total return |
| --- | --- |
| 1 month | −0.8% |
| 3 months | −6.4% |
| 6 months | −3.2% |
| year to date | +7.2% |
| 1 year | +4.0% |
| 3 years | +43.4% |
| 5 years | +3.4% |
| 10 years | +64.1% |

## VNQ against the whole market

Where VNQ ranks among every stock and fund, and what across the market has done better.

### How does VNQ rank among all ETFs?

This section ranks VNQ on return, volatility, risk-adjusted return and worst decline against every ETF worth at least $100 million with enough history.

- On return for the risk taken (the Sharpe ratio), VNQ ranks in the bottom 15% of the 1,560 ETFs with at least $100 million in assets.

| Measure | VNQ | Rank |
| --- | --- | --- |
| 1-year return | +4.0% | 1,635 of 2,485 (top 66%) |
| 3-year return | +43.4% | 1,294 of 1,949 (top 67%) |
| 5-year return | +3.4% | 1,318 of 1,560 (top 85%) |
| 10-year return | +64.1% | 713 of 958 (top 75%) |
| Volatility, 5 years | 18.9% | 1,028 of 1,560 (top 66%) |
| Sharpe ratio, 5 years | 0.13 | 1,333 of 1,560 (top 86%) |
| Worst decline, past 10 years | −42.4% | 627 of 951 (top 66%) |

### What has beaten VNQ on both return and risk?

Each dot is an investment, placed by how much it earned a year over the past 5 years (higher is better) and how much its price swung, its volatility (further left is calmer).

- 16 stocks and 482 ETFs worth at least $500 million sit in the green region: each earned more than VNQ over the past 5 years with smaller price swings. That is 14% of the 3,633 screened.
- Among those with at least half VNQ's swings, LVHI has the best return for its risk: 17.0% a year at 11.1% volatility, 41% less than VNQ's 18.9%, and a Sharpe ratio (return above cash per unit of volatility) of 1.48 against 0.13 for VNQ.
- None of VNQ's popular alternatives made it, but SPSB (investment grade bonds) did: 2.8% a year at 2.0% volatility, 89% less than VNQ's 18.9%.

### Is there a better investment than VNQ?

The table below lists investments that beat VNQ over the past 5 years on at least one of these measures: a higher annual return with lower volatility, a higher annual return at similar volatility, a similar return with lower volatility, a higher Sharpe ratio with a smaller worst decline, a higher total return in most periods from 3 months to 10 years, or smaller losses in recent market crashes, and, for funds, the same exposure at a lower expense ratio.

- Among VNQ's popular alternatives, PFF matched VNQ's return over the past 5 years (a loss of 0.2% a year against 0.7% a year) with 45% less volatility.
- USRT tracks the same thing for 0.08% a year against VNQ's 0.13%, and has kept pace over the past decade: about $50 less in fees on $10,000 over 10 years.
- Looking beyond its popular alternatives, IGF (infrastructure equity) and SPSB (investment grade bonds) earned more than VNQ with less volatility over the past 5 years. IGF returned 9.0% a year at 13.9% volatility, against 0.7% a year at 18.9%.

The 15 strongest of 498 investments that beat VNQ over the past 5 years, out of 3,633 stocks and funds worth at least $500 million.

| Investment | Group | Annual return (5 years) | Volatility | Sharpe | Worst decline (10 years) | 10Y return | Correlation with VNQ | Better on |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| VNQ: Vanguard Real Estate ETF (this page) |  | +0.7% | 18.9% | 0.13 | −42.4% | +64.1% |  |  |
| [KO](https://easycompare.io/research/ko): The Coca-Cola Company | Food & Beverages | +14.7% | 16.8% | 0.91 | −37.0% | +204% | 0.55 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| CHT: Chunghwa Telecom Co., Ltd. | Integrated Telecommunications | +7.7% | 13.3% | 0.63 | −23.8% | +101% | 0.39 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VTI](https://easycompare.io/research/vti): Vanguard Morningstar Total Stock Market ETF | US Total Market | +11.5% | 17.5% | 0.71 | −35.0% | +302% | 0.80 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| [VOO](https://easycompare.io/research/voo): Vanguard S&P 500 ETF | US Large-Cap Equity | +12.8% | 16.9% | 0.80 | −34.0% | +324% | 0.79 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| [BRK-B](https://easycompare.io/research/brk-b): Berkshire Hathaway Inc. | Insurance | +13.4% | 17.1% | 0.82 | −29.6% | +274% | 0.61 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| [JNJ](https://easycompare.io/research/jnj): Johnson & Johnson | Pharmaceuticals | +12.7% | 17.9% | 0.76 | −27.4% | +196% | 0.43 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| LVHI: Franklin International Low Volatility High Dividend Index ETF | International Equity | +17.0% | 11.1% | 1.48 | −32.4% | +194% | 0.70 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| FTLS: First Trust Long/Short Equity ETF | Broad Market | +10.2% | 10.4% | 0.99 | −20.6% | +158% | 0.71 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VXUS](https://easycompare.io/research/vxus): Vanguard Total International Stock ETF | International Equity | +8.2% | 16.4% | 0.57 | −36.0% | +140% | 0.78 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| AOR: iShares Core 60/40 Balanced Allocation ETF | Multi-Asset | +6.4% | 10.7% | 0.64 | −23.0% | +118% | 0.85 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| ACWV: iShares MSCI Global Min Vol Factor ETF | International | +6.3% | 10.3% | 0.65 | −28.8% | +116% | 0.85 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VTV](https://easycompare.io/research/vtv): Vanguard Morningstar Value ETF | US Large-Cap Value | +12.1% | 13.7% | 0.90 | −36.8% | +235% | 0.84 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| [VEA](https://easycompare.io/research/vea): Vanguard FTSE Developed Markets ETF | Developed International Equity | +9.3% | 16.9% | 0.61 | −35.8% | +153% | 0.80 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| DBA: Invesco DB Agriculture Fund | Alternatives | +10.7% | 13.8% | 0.81 | −35.3% | +62.2% | 0.18 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VIG](https://easycompare.io/research/vig): Vanguard Dividend Appreciation ETF | US Dividend Equity | +10.4% | 14.1% | 0.78 | −31.7% | +258% | 0.88 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |

## VNQ against its popular alternatives

The investments people most often weigh against VNQ, compared period by period and year by year.

### How do VNQ's risk and return compare with its alternatives?

This map plots each investment's annual return over the past 5 years against its volatility, the size of its typical price swings.

- BBRE, SCHH and REET were both more rewarding and calmer than VNQ over the past 5 years, earning a higher annual return with lower volatility.
- Over the past 5 years, VNQ returned 0.7% a year, less than the S&P 500's 12.7%, with higher volatility (18.9% against 17.1%).

### Has VNQ consistently beaten its popular alternatives?

This section compares VNQ with the investments people most often weigh against it, checking each one over eight periods from one month to ten years.

- Six of the 17 popular alternatives, led by ICF, REZ and USRT, outperformed VNQ in at least 3 of 5 short-term and 2 of 3 long-term timeframes.
- ICF and REZ outperformed VNQ in every long-term period and in all but one short-term period, the most consistent record in the group.
- ICF and XLRE earned more for the risk they took than VNQ (a higher Sharpe ratio) and fell less in their worst decline of the past 10 years.

| Investment | 1Y return | 3Y return | 5Y return | 10Y return | Periods ahead of VNQ | Verdict | Sharpe |
| --- | --- | --- | --- | --- | --- | --- | --- |
| VNQ: Vanguard Real Estate ETF (this page) | +4.0% | +43.4% | +3.4% | +64.1% |  |  | 0.13 |
| ICF: iShares Select U.S. REIT ETF | +7.2% | +46.3% | +7.2% | +70.3% | 5/5 short-term, 3/3 long-term | all-weather | 0.17 |
| REZ: iShares Residential and Multisector Real Estate ETF | +9.1% | +51.8% | +13.3% | +94.7% | 4/5 short-term, 3/3 long-term | all-weather | 0.23 |
| USRT: iShares Core U.S. REIT ETF | +8.9% | +50.7% | +15.9% | +80.1% | 3/5 short-term, 3/3 long-term | consistent | 0.25 |
| RWR: State Street SPDR Dow Jones REIT ETF | +9.0% | +50.3% | +12.9% | +64.6% | 3/5 short-term, 2/3 long-term | consistent | 0.22 |
| SCHH: Schwab U.S. REIT ETF | +7.1% | +45.6% | +7.7% | +44.7% | 3/5 short-term, 2/3 long-term | consistent | 0.17 |
| BBRE: JPMorgan BetaBuilders MSCI US REIT ETF | +8.3% | +49.2% | +14.7% | — | 3/5 short-term, 2/3 long-term | consistent | 0.24 |
| XLRE: State Street Real Estate Select Sector SPDR ETF | +3.3% | +43.4% | +6.4% | +89.1% | 1/5 short-term, 2/3 long-term |  | 0.16 |
| XHB: State Street SPDR S&P Homebuilders ETF | −10.4% | +39.2% | +31.1% | +223% | 0/5 short-term, 2/3 long-term |  | 0.33 |
| FREL: Fidelity MSCI Real Estate Index ETF | +3.6% | +42.9% | +3.1% | +71.3% | 0/5 short-term, 1/3 long-term |  | 0.13 |
| IYR: iShares U.S. Real Estate ETF | +2.5% | +41.0% | +2.4% | +67.9% | 0/5 short-term, 1/3 long-term |  | 0.12 |
| REET: iShares Global REIT ETF | +4.5% | +42.3% | +4.9% | +46.9% | 0/5 short-term, 1/3 long-term |  | 0.14 |
| JPRE: JPMorgan Realty Income ETF | +7.2% | +44.6% | — | — | 4/5 short-term, 0/3 long-term |  | — |
| KBWY: Invesco KBW Premium Yield Equity REIT ETF | +14.7% | +28.9% | +0.1% | +2.1% | 3/5 short-term, 0/3 long-term |  | 0.11 |
| PFF: iShares Preferred and Income Securities ETF | −3.8% | +21.6% | −0.9% | +29.6% | 1/5 short-term, 0/3 long-term |  | 0.04 |
| [BND](https://easycompare.io/research/bnd): Vanguard Total Bond Market ETF | −2.1% | +15.7% | −1.8% | +13.2% | 1/5 short-term, 0/3 long-term |  | -0.03 |
| SRVR: Pacer Data & Infrastructure Real Estate ETF | −7.7% | +24.4% | −20.3% | — | 1/5 short-term, 0/3 long-term |  | -0.13 |
| VNQI: Vanguard Global ex-U.S. Real Estate ETF | −6.9% | +31.9% | −9.8% | +18.8% | 0/5 short-term, 0/3 long-term |  | -0.06 |

### How did VNQ do year by year?

This table shows each investment's total return in every full calendar year since 2005, along with where VNQ ranked among its popular alternatives each year.

- VNQ finished ahead of the S&P 500 in nine of its 21 full calendar years, and behind it in each of the last four.
- Ranked against its popular alternatives each year, VNQ finished in the top quarter in five of 19 years and in the bottom quarter in no. In 2025, it ranked 7 of 18.
- Among its popular alternatives, BBRE came out ahead of VNQ most often, in four of the seven years both traded.

| Year | VNQ | SPY |
| --- | --- | --- |
| 2025 | +3.2% | +17.7% |
| 2024 | +4.8% | +24.9% |
| 2023 | +11.8% | +26.2% |
| 2022 | −26.2% | −18.2% |
| 2021 | +40.6% | +28.7% |
| 2020 | −4.6% | +18.3% |
| 2019 | +28.9% | +31.2% |
| 2018 | −6.0% | −4.6% |
| 2017 | +4.9% | +21.7% |
| 2016 | +8.6% | +12.0% |

## Risk and diversification

How VNQ has fallen, how it held up in crashes beside the S&P 500 and its popular alternatives, and what moves independently of it.

### What were VNQ's worst declines?

A drawdown is the decline from a peak to the lowest point before a new high.

- In all five of VNQ's worst declines, the S&P 500 held up better over the same dates.
- Not every decline was the market's doing: VNQ fell 18.0% from May to August 2013, while the S&P 500 slipped only 0.9%.
- The slowest recovery came after VNQ fell 73.1% from February 2007 to March 2009; it did not regain that peak until September 2012, four years later.

| Decline | Peak | Low | Back at the high | SPY over the same dates | Market event |
| --- | --- | --- | --- | --- | --- |
| −73.1% | February 7, 2007 | March 6, 2009 | September 7, 2012 | −50.5% | 2008 financial crisis |
| −42.4% | February 21, 2020 | March 23, 2020 | April 15, 2021 | −32.8% | Covid crash |
| −34.5% | December 31, 2021 | October 25, 2023 | June 12, 2026 | −9.7% | 2022 bear market |
| −18.0% | May 21, 2013 | August 19, 2013 | June 5, 2014 | −0.9% |  |
| −17.2% | January 27, 2015 | September 4, 2015 | May 4, 2016 | −4.1% | 2015 China and oil sell-off |

### How did VNQ do in stock market crashes?

This section measures how far VNQ, the S&P 500 and each alternative fell from peak to trough during every major market crash since 2000.

- Among its popular alternatives, BND held up best, falling less than VNQ in all nine crashes they both traded through.
- VNQ fell further than the S&P 500 in five of the nine crashes it has traded through. The clearest case was the 2008 financial crisis, when VNQ fell 70.0% and the S&P 500 fell 55.2%.

| Crash | Dates | VNQ fall | SPY fall |
| --- | --- | --- | --- |
| Dot-com bust | March 10, 2000 to October 9, 2002 | not trading | −47.5% |
| Global financial crisis | October 9, 2007 to March 9, 2009 | −70.0% | −55.2% |
| Flash crash | May 6, 2010 to May 7, 2010 | −1.7% | −1.5% |
| Euro debt crisis | July 22, 2011 to October 3, 2011 | −22.6% | −17.9% |
| China devaluation & oil rout | August 10, 2015 to February 11, 2016 | −11.5% | −12.8% |
| Volmageddon | February 2, 2018 to February 9, 2018 | −6.2% | −6.5% |
| Q4 2018 selloff | September 21, 2018 to December 24, 2018 | −12.8% | −19.3% |
| COVID crash | February 19, 2020 to March 23, 2020 | −42.4% | −33.7% |
| 2022 bear market | January 4, 2022 to October 12, 2022 | −31.8% | −24.5% |
| SVB / regional bank stress | March 8, 2023 to March 13, 2023 | −5.5% | −3.4% |

### How closely does VNQ move with the S&P 500?

Upside capture measures how much of the S&P 500's gains an investment kept in the months the market rose, and downside capture how much of its losses it took in the months the market fell.

- Nine of the 14 popular alternatives had a higher capture ratio (upside capture divided by downside capture) than VNQ's 0.65, led by XHB, REZ and XLRE.
- REZ took just 82% of the S&P 500's losses, against 106% for VNQ, while still keeping 62% of its gains.
- Over the past 10 years, VNQ captured 69% of the S&P 500's gains in rising months and 106% of its losses in falling months, with a beta of 0.89. Its share of the market's losses was larger than its share of the gains.

Measured over the past 10 years of monthly returns against SPY.

| Investment | Upside capture | Downside capture | Beta |
| --- | --- | --- | --- |
| VNQ: Vanguard Real Estate ETF (this page) | 69.0% | 106% | 0.89 |
| ICF: iShares Select U.S. REIT ETF | 65.0% | 97.0% | 0.84 |
| REZ: iShares Residential and Multisector Real Estate ETF | 62.0% | 82.0% | 0.77 |
| USRT: iShares Core U.S. REIT ETF | 70.0% | 103% | 0.91 |
| RWR: State Street SPDR Dow Jones REIT ETF | 69.0% | 106% | 0.92 |
| SCHH: Schwab U.S. REIT ETF | 65.0% | 107% | 0.89 |
| XLRE: State Street Real Estate Select Sector SPDR ETF | 68.0% | 97.0% | 0.84 |
| XHB: State Street SPDR S&P Homebuilders ETF | 112% | 141% | 1.33 |
| FREL: Fidelity MSCI Real Estate Index ETF | 70.0% | 106% | 0.89 |
| IYR: iShares U.S. Real Estate ETF | 69.0% | 106% | 0.89 |
| REET: iShares Global REIT ETF | 65.0% | 107% | 0.89 |
| KBWY: Invesco KBW Premium Yield Equity REIT ETF | 75.0% | 145% | 1.16 |
| PFF: iShares Preferred and Income Securities ETF | 39.0% | 59.0% | 0.50 |
| [BND](https://easycompare.io/research/bnd): Vanguard Total Bond Market ETF | 13.0% | 19.0% | 0.15 |
| VNQI: Vanguard Global ex-U.S. Real Estate ETF | 55.0% | 101% | 0.75 |

### What diversifies VNQ?

Correlation measures how closely two investments move together, on a scale from 1 (in lockstep) through 0 (unrelated) to -1 (in opposite directions).

- Moving a fifth of the money in VNQ into DBMF would have cut the portfolio's volatility by 22% over the past 5 years and raised its annual return (+1.4% for VNQ alone, +3.6% for the mix).
- FIX made money in four of the five calendar years in which VNQ lost money.
- Among large ETFs, DXJ, SMH and GLD have moved largely independently of VNQ over the past 5 years, with correlations of 0.49 or lower, and each still earned a positive 5-year return.

| Investment | Correlation with VNQ | 5Y return | Volatility | Sharpe | Rose in VNQ's 5 down years |
| --- | --- | --- | --- | --- | --- |
| DXJ: WisdomTree Japan Hedged Equity Fund | 0.36 | +225% | 19.1% | 1.34 | 2 of 5 |
| [SMH](https://easycompare.io/research/smh): VanEck Semiconductor ETF | 0.49 | +323% | 36.9% | 0.97 | 2 of 5 |
| [GLD](https://easycompare.io/research/gld): SPDR Gold Shares | 0.27 | +126% | 18.9% | 0.96 | 3 of 5 |
| FLTW: Franklin FTSE Taiwan ETF | 0.49 | +168% | 24.3% | 0.94 | 1 of 5 |
| [XLE](https://easycompare.io/research/xle): State Street Energy Select Sector SPDR ETF | 0.29 | +177% | 25.5% | 0.93 | 2 of 5 |
| AMLP: Alerian MLP ETF | 0.42 | +111% | 18.9% | 0.89 | 1 of 5 |
| DBMF: iMGP DBi Managed Futures Strategy ETF | -0.26 | +59.7% | 12.4% | 0.82 | 2 of 5 |
| DBA: Invesco DB Agriculture Fund | 0.18 | +66.4% | 13.8% | 0.81 | 1 of 5 |

## Common questions

### What was VNQ's worst drawdown?

VNQ's deepest decline since it began trading in 2004 was 73.1%, from February 2007 to March 2009. It took about four years from the low to climb back to its old high. Because VNQ launched in September 2004, that record does not include the dot-com bust.

### What were VNQ's best and worst years?

Over 21 full calendar years, VNQ's best year was 2021, when it returned 40.5%. Its worst was 2008, with a return of -37.0%.

### Is there a better investment than VNQ?

Among VNQ's popular alternatives, PFF matched VNQ's return over the past 5 years (a loss of 0.2% a year against 0.7% a year) with 45% less volatility. USRT tracks the same thing for 0.08% a year against VNQ's 0.13%, and has kept pace over the past decade: about $50 less in fees on $10,000 over 10 years.

### Is VNQ more volatile than the S&P 500?

Yes. VNQ's volatility over the past 5 years was 18.9%, 1.1 times the S&P 500's 17.1%. Volatility measures how widely returns swing around their average: in roughly two years out of three, VNQ's return lands within 18.9% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump.

### What is VNQ's Sharpe ratio?

VNQ's Sharpe ratio over the past 5 years was 0.13, against 0.79 for the S&P 500, so VNQ earned less for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings.

### How correlated is VNQ with the S&P 500?

Over the past 5 years, VNQ's monthly returns had a correlation of 0.79 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They often move together: some diversification next to an index fund, but not a cushion. In the table, the correlation column measures each option against VNQ instead: the lower it is, the more that option would diversify a VNQ holding.

### What are the best alternatives to VNQ?

Of the 17 popular alternatives we compared, six outperformed VNQ in at least 3 of 5 short-term and 2 of 3 long-term timeframes, with dividends reinvested: ICF, REZ and USRT.

### Did VNQ outperform the S&P 500?

VNQ finished ahead of the S&P 500 (SPY) in nine of 21 full calendar years. In 2025, it returned +3.2%, against +17.7% for the index.

### How did VNQ do in stock market crashes?

VNQ fell less than the S&P 500 (SPY) in two of the nine major crashes it has traded through, and further in five. The clearest case was the 2008 financial crisis, when VNQ fell 70.0% and the S&P 500 fell 55.2%.

### What diversifies VNQ?

These had a low correlation with VNQ over the past 5 years and still earned a positive 5-year return: among large ETFs, DXJ (correlation 0.36), SMH (correlation 0.49) and GLD (correlation 0.27); among large stocks, CAH (correlation 0.32), CLS (correlation 0.24) and FIX (correlation 0.42). A correlation near zero means the two have moved largely independently.

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## Explore further

- Full page with charts: https://easycompare.io/research/vnq
- All research pages: https://easycompare.io/llms.txt
- Compare the entire market against VNQ live: https://betterthanspy.com/?b=VNQ&utm_source=easycompare&utm_medium=research