B
oth ETFs give investors exposure to U.S. real‑estate, yet the way each index is constructed causes distinct portfolio dynamics when market conditions and rates change.
**Vanguard Real Estate ETF (VN Q)**
* Lower expense ratio (0.13 %) than RWR (0.25 %)
* Much larger AUM – $65.4 bn versus $1.71 bn for RWR
* Tracks the MSCI US Investable Market Real Estate 25/50 Index, which includes a wider universe of real‑estate companies, some non‑REITs, and a few non‑property sectors.
* Holds 158 securities, 98 % real‑estate, 1 % communication services, 1 % cash. Top holdings: Welltower, Prologis, American Tower.
* 1‑yr total return: –1.15 % (as of 2025‑12‑18)
* Dividend yield: 3.86 %
* Beta: 1.2 (vs. 1.18 for RWR)
**State Street SPDR Dow Jones REIT ETF (RWR)**
* Focuses strictly on the Dow Jones U.S. Select REIT Capped Index, containing only REITs.
* 102 holdings, all classified as real‑estate.
* 1‑yr total return: –0.63 %
* Dividend yield: 3.87 %
* Beta: 1.18
* Max drawdown over 5 years: 32.58 % (vs. 34.48 % for VN Q)
* Growth of $1,000 over 5 years: $1,151 (VN Q) vs. $1,047 (RWR)
Neither ETF uses leverage, currency hedges, or ESG screens, making them straightforward real‑estate plays.
**Investor implications**
* **VN Q** is a large, liquid core holding with a low fee, suitable for a long‑term, stable allocation that can ride through rate cycles with minimal oversight.
* **RWR** offers a tighter REIT focus, appealing to those who want a concentrated REIT exposure even if it means a smaller, more narrowly defined portfolio.
**Key differences**
* VN Q’s broader index spreads risk across more business models and revenue streams, potentially smoothing volatility.
* RWR’s narrower mandate keeps returns more tightly linked to a smaller set of property owners and operators, which can amplify sensitivity to REIT‑specific factors.
**Glossary (short)**
* **ETF** – a fund that trades on an exchange and holds a basket of assets.
* **Expense ratio** – annual fee as a % of assets.
* **AUM** – total market value of assets managed.
* **Dividend yield** – annual dividends divided by share price.
* **REIT** – a company that owns or finances income‑producing real‑estate.
* **Beta** – volatility relative to the S&P 500.
* **Drawdown** – decline from a peak to a trough over a period.
* **Total return** – price change plus dividends, assuming reinvestment.
In summary, while both ETFs provide U.S. real‑estate exposure, VN Q’s lower cost and broader composition make it a solid long‑term core, whereas RWR’s REIT‑only focus offers a more concentrated bet for investors seeking pure REIT exposure.
