Real Estate ETFs: REET Has Broader Diversification, VNQ Boasts Higher Yield

By Jake Lerch – Mar 18, 2026 at 10:04AM ESTKey PointsREET offers broader global exposure with more holdings, while VNQ is U.S.-focused and much larger by assets under managementVNQ and REET have nearly identical expense ratios, but VNQ delivers a slightly higher dividend yieldBoth funds have experienced similar five-year drawdowns and risk profiles, despite their different geographic focusesVanguard Real Estate ETF (VNQ 0.81%) and iShares Global REIT ETF (REET 0.54%) are both diversified real estate funds, but VNQ focuses solely on U.S. REITs with a higher yield and much larger assets under management, while REET offers more global diversification.VNQ and REET each aim to give investors access to the real estate sector by holding portfolios of real estate investment trusts (REITs), but their strategies differ: VNQ tracks the U.S. market, while REET includes international REITs for broader diversification. This comparison examines cost, performance, risk, liquidity, and portfolio composition to highlight which factors may appeal to you depending on your investing priorities.Snapshot (cost & size)MetricVNQREETIssuerVanguardISharesExpense ratio0.13%0.14%1-yr return (as of 2026-03-16)1.3%6.5%Dividend yield3.7%3.5%Beta1.020.95AUM$69.6 billion$4.6 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.Both funds are low-cost, with VNQ edging out REET by one basis point on expense ratio, making them equally affordable for long-term holding. VNQ’s dividend yield is marginally higher, which may appeal to income-focused investors, though the difference is slight.Performance & risk comparisonMetricVNQREETMax drawdown (5 y)-34.48%-32.14%Growth of $1,000 over 5 years$1,003$1,004What's insideREET holds 325 securities spanning global developed and emerging real estate markets, offering broader diversification than most U.S.-focused REIT funds. Its largest positions include Welltower Inc (WELL 0.27%), Prologis Reit Inc (PLD 0.94%), and Equinix Reit Inc (EQIX 0.22%), similar to VNQ but with allocations that reflect its international reach. The fund has nearly 12 years of track record, and its entire portfolio is in the real estate sector.By contrast, VNQ concentrates on the U.S. market with 158 holdings, predominantly in real estate but with small tilts toward communication services and technology. Top names like Welltower Inc, Prologis Inc, and Equinix Inc overlap with REET, but VNQ’s focus is strictly domestic. Both funds avoid leverage and other structural quirks, making them straightforward real estate plays.For more guidance on ETF investing, check out the full guide at this link.What this means for investorsFor many investors, real estate is a key part of any diversified investment portfolio. One way to achieve such exposure is through the ownership of a real estate exchanged-traded fund (ETF). Here’s how two such funds, Vanguard Real Estate ETF (VNQ) and iShares Global REIT ETF (REET), stack up in a head-to-head matchup.First, let’s examine VNQ. As one of the most popular real estate ETFs, the fund offers several advantages. Size is one. Its AUM of nearly $70 billion is significantly more than REET’s AUM of less than $5 billion. That gives VNQ an advantage in liquidity. Another advantage for VNQ is its slightly lower expense ratio (0.13% vs. 0.14%). Lastly, VNQ boasts a marginally higher dividend yield of 3.7%, compared to 3.5% for REET.REET, on the other hand, has its own set of advantages. For example, REET is more diversified, holding nearly twice as many stocks as VNQ. Many of those stocks are based overseas or in developing markets, which may add further diversification. In addition, REET boasts a higher one-year performance return of 6.5%, while VNQ’s one-year return is only 1.3%.In summary, some investors may favor VNQ for its size, lower fees, and higher yield. Others may seek out REET for its greater diversification and superior recent returns.Read NextMar 18, 2026 •By Jake LerchREET Delivers a Higher Yield, But ICF Provides Greater Exposure to the U.S. REIT MarketMar 18, 2026 •By Sara AppinoRWR vs. REET: Same Blue-Chip REIT Foundation, Different Geographic StrategiesMar 18, 2026 •By Sara AppinoREET vs. HAUZ: One Fund Anchors in U.S. REITs, the Other Invests Entirely AbroadJan 11, 2026 •By Adé HennisVNQI vs. REET: How Does Vanguard's Fund Compare Against the Largest Global Real Estate ETF?Jan 10, 2026 •By Adé HennisGQRE vs. REET: The Rising ETF Against the Largest Global Real Estate ETFDec 30, 2025 •By Eric TrieHAUZ vs REET: Global Real Estate or a U.S.-Anchored REIT PortfolioAbout the AuthorJake Lerch is a contributing Motley Fool technology analyst covering artificial intelligence, cloud computing, cybersecurity, e-commerce, and semiconductors. Prior to The Motley Fool, Jake worked for 12 years at Credit Suisse, an international investment bank. He holds a bachelor’s degree in business with a concentration in economics from the University of North Carolina at Wilmington.TMFRescueDogStocks MentionediShares Trust - iShares Global REIT ETFNYSEMKT: REET$26.01(-0.59%)-$0.16Vanguard Real Estate ETFNYSEMKT: VNQ$92.51(-0.89%)-$0.83*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.