VNQ vs VTI: Vanguard Real Estate ETF vs Vanguard Total Stock Market ETF Comparison
Compare VNQ (Vanguard Real Estate ETF) and VTI (Vanguard Total Stock Market ETF) by expense ratio, dividend yield, holdings, and more.
Key Differences
- 1Expense ratio: VTI 0.03% vs VNQ 0.13% (VTI is 0.10%p cheaper)
- 2Dividend yield: VNQ 3.72% vs VTI 1.33%
- 3Category: VNQ is Alternative Investment, VTI is Index Tracking
- 4Holdings: VNQ 164 vs VTI 4,026
Conclusion
VNQ and VTI each have different strengths, so the choice depends on your investment objectives. Choose the one with lower fees if cost is a priority, or the one with higher yield if income is your goal.
| Category | VNQ | VTI |
|---|---|---|
| Fund Name | Vanguard Real Estate ETF | Vanguard Total Stock Market ETF |
| Current Price | ... | ... |
| Category | Alternative Investment | Index Tracking |
| Expense Ratio | 0.13% | 0.03% |
| Dividend Yield | 3.72% | 1.33% |
| Holdings | 164 | 4026 |
VNQ Top Holdings
- 1. Prologis
- 2. American Tower
- 3. Crown Castle
- 4. Equinix
VTI Top Holdings
- 1. Apple
- 2. Microsoft
- 3. Amazon
- 4. Nvidia
- 5. Alphabet
VNQ Features
- •REIT investing
- •High dividend
- •Inflation hedge
- •Real estate exposure
VTI Features
- •Covers entire market
- •Includes small-cap stocks
- •Extremely diversified
- •Low cost
Pros & Cons
VNQ
Advantages
- ✓ Indirect real estate investment
- ✓ High dividend income
- ✓ Inflation hedge
Disadvantages
- ⚠ Interest rate sensitive
- ⚠ Economically sensitive
- ⚠ Real estate market risk
VTI
Advantages
- ✓ Perfect diversification
- ✓ Captures small-cap growth
- ✓ Very low expense ratio
Disadvantages
- ⚠ Total market risk
- ⚠ No individual stock selection
- ⚠ Average returns
Investment Strategy
Best For: VNQ
Allocate 5-10% of total portfolio for inflation hedging
Best For: VTI
Single-ETF portfolio possible; recommended to combine with international ETFs
Detailed Analysis
VNQ (Vanguard Real Estate ETF) and VTI (Vanguard Total Stock Market ETF) They belong to different categories — Alternative Investment and Index Tracking — representing distinct investment areas. VNQ: Vanguard Real Estate ETF (VNQ) is an exchange-traded fund that provides investors with exposure to alternative assets and thematic strategies. It carries an expense ratio of 0.13%. The fund offers a dividend yield of approximately 3.72%. The portfolio holds 164 securities. With an expense ratio of 0.13% and dividend yield of 3.72%, its top holdings include Prologis, American Tower, Crown Castle. Key features include REIT investing, High dividend, with Indirect real estate investment being a major advantage. VTI: Vanguard Total Stock Market ETF (VTI) is an exchange-traded fund that provides investors with exposure to broad market indices. It carries an expense ratio of 0.03%. The fund offers a dividend yield of approximately 1.33%. The portfolio holds 4026 securities. With an expense ratio of 0.03% and dividend yield of 1.33%, top holdings include Apple, Microsoft, Amazon. Notable features are Covers entire market, Includes small-cap stocks, with Perfect diversification as a core strength. In terms of expense ratio, VTI is 0.10%p cheaper, which can lead to significant cost savings through compounding over long-term investment. Over 20 years with a $100,000 investment, this difference can amount to thousands of dollars.
Investment Recommendation
VNQ is suitable for Allocate 5-10% of total portfolio for inflation hedging, while VTI is suitable for Single-ETF portfolio possible; recommended to combine with international ETFs. Since they are in different categories, holding both can provide portfolio diversification benefits. Adjust the allocation based on your risk tolerance and investment horizon. For beginners, we recommend a core-satellite strategy: choose a low-cost, well-diversified ETF as your core holding, and allocate the rest to satellite positions.
Key Summary
Both VNQ and VTI are excellent ETFs for their respective investment objectives. The key is to choose based on your investment goals, time horizon, and risk tolerance. Rather than focusing on a single metric (dividend yield, fees, etc.), evaluate from a holistic portfolio perspective. Use our rebalancing calculator to easily determine the optimal asset allocation including both ETFs.
VNQ vs VTI Investment Guide
Both VNQ and VTI are popular US ETFs, but they differ in investment strategy and portfolio role. VNQ has an expense ratio of 0.13%, while VTI charges 0.03%, giving VTI a cost advantage. In terms of dividend yield, VNQ offers 3.72% while VTI offers 1.33%, making VNQ the better choice for income investors.
When choosing between the two, consider your investment goals, time horizon, and risk tolerance. If long-term growth is your priority, favor the ETF with lower fees and broader diversification. If you need steady cash flow, the higher-yielding ETF may be more suitable. You can also hold both in your portfolio for a complementary approach.
Regardless of which ETF you choose, maintaining your target allocation through regular rebalancing is key to long-term performance. Review your portfolio quarterly or semi-annually, and adjust if weights have drifted significantly. Our rebalancing calculator can automatically determine the buy/sell quantities for each holding.
5 Things to Check When Comparing ETFs
Expense Ratio: Even a 0.1% difference in fees can translate to thousands of dollars over long-term investing. When two ETFs track a similar index, the lower-cost option has the edge.
Tracking Index & Holdings: Even ETFs in the same category may track different indices. Review the top holdings and sector weights to find the best fit for your investment goals.
Dividend Policy: Compare dividend frequency (monthly vs quarterly), yield, and dividend growth rate. Monthly dividend ETFs may be preferable if you need regular cash flow.
Trading Volume & Liquidity: Sufficient daily trading volume ensures you can buy and sell at fair prices. Low-volume ETFs may have wider bid-ask spreads, increasing your trading costs.
Portfolio Role: Determine whether the ETF serves as a core or satellite holding in your portfolio, and size your position accordingly.