IYR vs VNQI: Real Estate ETF Showdown
Institutional side-by-side analysis of fees, dividend cash flows, and underlying holdings overlap.
Key Fundamental Specifications
| Metric | IYR | VNQI |
|---|---|---|
| Annual Expense Ratio | 0.39% | 0.12% Lowest Fee |
| Annual Dividend Yield | 3.25% | 4.60% Higher Yield |
| Assets Under Management (AUM) | $3.8 Billion | $3.6 Billion |
| Number of Holdings | 75 Constituents | 650 Constituents |
| Fund Issuer | BlackRock | Vanguard |
| Benchmark Index | Dow Jones U.S. Real Estate Index | S&P Global ex-U.S. Property Index |
Top Holdings & Weight Overlap
Constituent weights across both funds:
| REIT Constituent | IYR Weight | VNQI Weight |
|---|---|---|
| PLD Prologis Inc. | 8.1% | 0.0% |
| EQIX Equinix Inc. | 6.9% | 0.0% |
| WELL Welltower Inc. | 6.5% | 0.0% |
| SPG Simon Property Group | 4.5% | 0.0% |
| PSA Public Storage | 4.2% | 0.0% |
| DLR Digital Realty Trust | 4.0% | 0.0% |
| O Realty Income Corp. | 3.9% | 0.0% |
Institutional Verdict: IYR or VNQI?
Fee Advantage: VNQI offers the lower expense ratio at 0.12% vs 0.39%. Over a 20-year holding period, lower expense drag preserves thousands of dollars in cumulative returns.
Yield Generation: For income-focused investors, VNQI provides the higher current dividend yield at 4.60%, making it more attractive for living off dividend cash flow.
Conclusion: If your priority is low-cost passive index tracking, choose VNQI. If your mandate is maximum immediate dividend yield, choose VNQI.
Frequently Asked Questions
What is the difference between IYR and VNQI?
iShares U.S. Real Estate ETF (IYR) is issued by BlackRock with an expense ratio of 0.39% and dividend yield of 3.25%. In comparison, Vanguard Global ex-U.S. Real Estate ETF (VNQI) is issued by Vanguard charging 0.12% with a yield of 4.60%.
Which REIT ETF has lower fees: IYR or VNQI?
VNQI has the lower annual expense ratio (0.12% vs 0.39%), saving long-term investors money on compounding fee drag.
Which ETF pays a higher dividend yield: IYR or VNQI?
VNQI currently pays the higher annualized dividend yield (4.60% vs 3.25%).
Can I hold both IYR and VNQI in a portfolio?
While you can hold both, IYR and VNQI share significant constituent overlap in top REITs like Prologis, American Tower, and Equinix. Holding both may cause redundant portfolio exposure.