XLRE vs VNQ: Head-to-Head Comparison
XLRE vs VNQ: Real Estate Select Sector SPDR Fund has an expense ratio of 0.09% while Vanguard Real Estate ETF charges 0.12%. XLRE holds 31 securities vs VNQ's 160. 5-year returns: 5.50% vs 4.80%.
Last updated: April 2026
Real Estate
Quick Verdict
VNQ edges out XLRE with a stronger Beginner Suitability Score (8.5 vs 8). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | XLRE | VNQ |
|---|---|---|
| Expense Ratio | 0.09% | 0.12% |
| AUM | $6.0B | $34.0B |
| Dividend Yield | 3.40% | 3.90% |
| Holdings | 31 | 160 |
| 1-Year Return | 8.00% | 11.20% |
| 5-Year Return (Ann.) | 5.50% | 4.80% |
| 10-Year Return (Ann.) | 6.50% | 6.50% |
| Beta | 0.85 | 1.05 |
| P/E Ratio | 36.5 | 35.2 |
XLRE 5-year annualized return is 5.50% compared to VNQ's 4.80%. Over 10 years, XLRE returned 6.50% vs VNQ's 6.50%.
View data table
| Period | XLRE Return | VNQ Return |
|---|---|---|
| YTD | 2.50% | 0.80% |
| 1 Year | 8.00% | 11.20% |
| 3 Year | 3.50% | 2.10% |
| 5 Year | 5.50% | 4.80% |
| 10 Year | 6.50% | 6.50% |
Key Differences Between XLRE and VNQ
XLRE (Real Estate Select Sector SPDR Fund) is a real estate fund managed by State Street. XLRE tracks the Real Estate Select Sector Index, giving investors exposure to U.S. real estate investment trusts (REITs) and real estate companies within the S&P 500. It offers a straightforward way to add property-related investments to your portfolio without buying physical real estate. The fund focuses on large-cap REITs spanning data centers, cell towers, and traditional property sectors.
VNQ (Vanguard Real Estate ETF) is a real estate fund managed by Vanguard. VNQ provides exposure to the U.S. real estate market through Real Estate Investment Trusts (REITs) without the hassle of buying physical property. REITs are required by law to distribute at least 90% of their taxable income as dividends, which gives VNQ a higher yield than most equity ETFs. Beginners interested in real estate investing can use VNQ to add property exposure to their portfolio at a fraction of the cost of buying a building.
The most notable differences are in fees (0.09% vs 0.12%), number of holdings (31 vs 160), and 5-year returns (5.50% vs 4.80%).
XLRE vs VNQ multi-factor comparison: XLRE has a 0.09% expense ratio, 5.50% 5-year return, 31 holdings, 0.85 beta, and 3.40% yield. VNQ has 0.12% expense ratio, 4.80% 5-year return, 160 holdings, 1.05 beta, and 3.90% yield.
View data table
| Metric | XLRE | VNQ |
|---|---|---|
| Expense Ratio | 0.09% | 0.12% |
| 5-Year Return | 5.50% | 4.80% |
| Holdings | 31 | 160 |
| Beta | 0.85 | 1.05 |
| Dividend Yield | 3.40% | 3.90% |
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Holdings Overlap Analysis
100%
Holdings Overlap
XLRE and VNQ share 100% of their top holdings. This means they are very similar funds — owning both would result in significant duplication in your portfolio. For most beginners, choosing one is sufficient.
XLRE and VNQ share 100% of their top holdings (high overlap). XLRE has 31 total holdings and VNQ has 160. Common holdings include PLD, AMT, EQIX.
View data table
| Metric | XLRE | VNQ |
|---|---|---|
| Overlap | 100% | 100% |
| Unique Holdings | 0% | 0% |
| Total Holdings | 31 | 160 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
XLRE
Fee cost: $771
VNQ
Fee cost: $1,025
Over 20 years, the fee difference amounts to $254 on a $10,000 investment. XLRE saves you more in fees over time.
On a $10,000 investment over 20 years at 8% return, XLRE (0.09% fee) grows to $45,839 while VNQ (0.12% fee) grows to $45,585. The fee difference costs $254.
View data table
| Year | XLRE Value | VNQ Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,632 | $14,612 |
| 10 | $21,410 | $21,351 |
| 15 | $31,327 | $31,197 |
| 20 | $45,839 | $45,585 |
Which One Should a Beginner Choose?
Choose XLRE if: You want investors seeking passive real estate income, portfolio diversification away from traditional stocks and bonds, income-oriented investors looking for higher dividend yields. It's managed by State Street with an expense ratio of 0.09%.
Choose VNQ if: You want income-seeking investors who want real estate exposure without being a landlord, investors looking to diversify beyond stocks and bonds, those who want inflation protection through real asset ownership. It's managed by Vanguard with an expense ratio of 0.12%.
Can You Own Both XLRE and VNQ?
With 100% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.
Frequently Asked Questions
Should I buy XLRE or VNQ?▾
VNQ edges out XLRE with a stronger Beginner Suitability Score (8.5 vs 8). It offers better overall characteristics for new investors. However, both are solid options. XLRE is best for investors who want investors seeking passive real estate income, while VNQ is better suited for income-seeking investors who want real estate exposure without being a landlord.
What is the difference between XLRE and VNQ?▾
XLRE (Real Estate Select Sector SPDR Fund) tracks real estate investments with 31 holdings and a 0.09% expense ratio. VNQ (Vanguard Real Estate ETF) focuses on real estate with 160 holdings at 0.12%. Their top holdings overlap by 100%.
Can I own both XLRE and VNQ?▾
Since XLRE and VNQ have 100% holdings overlap, owning both means significant duplication. Most beginners are better off choosing one.