# VNQ alternatives: 7 similar ETFs compared

> ETFs similar to VNQ, closest first, with each fund's fee, what it tracks, and returns and worst drops on the same dates as VNQ. Updated daily.

The ETFs most like VNQ are IYR, SCHH and XLRE. IYR, SCHH and XLRE hold US real estate investment trusts (REITs), companies that own and rent out property, like VNQ. SCHH costs less: 0.07% a year against 0.13%.

Written by [the Tactfolio research team](https://tactfolio.com/about/editorial-policy). Fund facts checked October 17, 2026. Prices through October 16, 2026.

## Key points

- 7 funds can stand in for VNQ: 3 of the same kind and 4 related funds.
- VNQ charges 0.13% a year (about $13 on $10,000). The cheapest alternative here, SCHH, charges 0.07%.
- IYR moved most like VNQ: a daily correlation of 1.00 over about the last five years.
- Returns and drops for each pair use the same dates for both funds.

## VNQ alternatives at a glance

Each fund below can stand in for VNQ, closest first. "Same kind" funds hold the same kind of stocks through a different index. "Related" funds make a different bet that often moves the same way.

| ETF | How close | Yearly fee | Fee on $10,000 | Tracks |
| --- | --- | --- | --- | --- |
| **VNQ** | This fund | 0.13% | $13 | MSCI US Investable Market Real Estate 25/50 Index |
| [IYR](https://tactfolio.com/etf/iyr.md) | Same kind of fund | 0.37% | $37 | Dow Jones U.S. Real Estate Capped Index |
| [SCHH](https://tactfolio.com/etf/schh.md) | Same kind of fund | 0.07% | $7 | Dow Jones Equity All REIT Capped Index |
| [XLRE](https://tactfolio.com/etf/xlre.md) | Same kind of fund | 0.08% | $8 | Real Estate Select Sector Index |
| [RWO](https://tactfolio.com/etf/rwo.md) | Related fund | 0.5% | $50 | Dow Jones Global Select Real Estate Securities Index |
| [RWX](https://tactfolio.com/etf/rwx.md) | Related fund | 0.59% | $59 | Dow Jones Global ex-U.S. Select Real Estate Securities Index |
| [VPU](https://tactfolio.com/etf/vpu.md) | Related fund | 0.09% | $9 | MSCI US Investable Market Utilities 25/50 Index |
| [XLU](https://tactfolio.com/etf/xlu.md) | Related fund | 0.08% | $8 | Utilities Select Sector Index |

Fees come from each fund company, checked on the dates shown on each fund's page.

## How VNQ and its alternatives did over the same dates

Each row measures the alternative and VNQ on the days both traded, so neither gets a head start. Correlation shows how closely their daily moves matched over about the last five years. A value of 1 means they always moved together.

| ETF | Moves with VNQ | Per year | VNQ per year | Worst drop | VNQ worst drop | Since |
| --- | --- | --- | --- | --- | --- | --- |
| [IYR](https://tactfolio.com/etf/iyr.md) | 1.00 | 6.5% | 7.3% | −74.1% | −73.1% | September 2004 |
| [SCHH](https://tactfolio.com/etf/schh.md) | 0.99 | 6.6% | 7.4% | −44.2% | −42.4% | January 2011 |
| [XLRE](https://tactfolio.com/etf/xlre.md) | 0.99 | 6.7% | 5.5% | −38.8% | −42.4% | October 2015 |
| [RWO](https://tactfolio.com/etf/rwo.md) | 0.97 | 3.6% | 6.2% | −67.7% | −66.9% | May 2008 |
| [RWX](https://tactfolio.com/etf/rwx.md) | 0.70 | 0.4% | 5.2% | −73.6% | −73.1% | December 2006 |
| [VPU](https://tactfolio.com/etf/vpu.md) | 0.66 | 9.3% | 7.3% | −46.3% | −73.1% | September 2004 |
| [XLU](https://tactfolio.com/etf/xlu.md) | 0.65 | 9.3% | 7.3% | −46.5% | −73.1% | September 2004 |

Prices through October 16, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

## Each VNQ alternative, compared

### IYR: iShares U.S. Real Estate ETF

IYR also holds US real estate investment trusts (REITs), companies that own and rent out property. It tracks the Dow Jones U.S. Real Estate Capped Index, while VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index.

It charges 0.37% a year, about $37 on $10,000, against $13 for VNQ. It held 58 stocks, against 139 for VNQ.

From September 2004 to October 2026, IYR returned about 6.5% a year and VNQ returned about 7.3% a year. Over about the last five years they moved almost exactly together (correlation 1.00).

Read the [IYR fund page](https://tactfolio.com/etf/iyr.md) for its returns by year and worst drop.

### SCHH: Schwab U.S. REIT ETF

SCHH also holds US real estate investment trusts (REITs), companies that own and rent out property. It tracks the Dow Jones Equity All REIT Capped Index, while VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index.

It charges 0.07% a year, about $7 on $10,000, against $13 for VNQ. It held 117 stocks, against 139 for VNQ.

From January 2011 to October 2026, SCHH returned about 6.6% a year and VNQ returned about 7.4% a year. Over about the last five years they moved almost exactly together (correlation 0.99).

Read the [SCHH fund page](https://tactfolio.com/etf/schh.md) for its returns by year and worst drop.

### XLRE: State Street Real Estate Select Sector SPDR ETF

XLRE also holds US real estate investment trusts (REITs), companies that own and rent out property. It tracks the Real Estate Select Sector Index, while VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index.

It charges 0.08% a year, about $8 on $10,000, against $13 for VNQ. It held 30 stocks, against 139 for VNQ.

From October 2015 to October 2026, XLRE returned about 6.7% a year and VNQ returned about 5.5% a year. Over about the last five years they moved almost exactly together (correlation 0.99).

Read the [XLRE fund page](https://tactfolio.com/etf/xlre.md) for its returns by year and worst drop.

### RWO: State Street SPDR Dow Jones Global Real Estate ETF

RWO is a looser match. It holds property companies around the world, while VNQ holds US real estate investment trusts (REITs), companies that own and rent out property.

It charges 0.5% a year, about $50 on $10,000, against $13 for VNQ. It held 224 stocks, against 139 for VNQ.

From May 2008 to October 2026, RWO returned about 3.6% a year and VNQ returned about 6.2% a year. Over about the last five years they moved almost exactly together (correlation 0.97).

Read the [RWO fund page](https://tactfolio.com/etf/rwo.md) for its returns by year and worst drop.

### RWX: State Street SPDR Dow Jones International Real Estate ETF

RWX is a looser match. It holds property companies around the world, while VNQ holds US real estate investment trusts (REITs), companies that own and rent out property.

It charges 0.59% a year, about $59 on $10,000, against $13 for VNQ. It held 126 stocks, against 139 for VNQ.

From December 2006 to October 2026, RWX returned about 0.4% a year and VNQ returned about 5.2% a year. Over about the last five years they often moved together, but not always (correlation 0.70).

Read the [RWX fund page](https://tactfolio.com/etf/rwx.md) for its returns by year and worst drop.

### VPU: Vanguard Utilities ETF

VPU is a looser match. It holds US electric, gas and water companies, while VNQ holds US real estate investment trusts (REITs), companies that own and rent out property.

It charges 0.09% a year, about $9 on $10,000, against $13 for VNQ. It held 68 stocks, against 139 for VNQ.

From September 2004 to October 2026, VPU returned about 9.3% a year and VNQ returned about 7.3% a year. Over about the last five years they often moved together, but not always (correlation 0.66).

Read the [VPU fund page](https://tactfolio.com/etf/vpu.md) for its returns by year and worst drop.

### XLU: State Street Utilities Select Sector SPDR ETF

XLU is a looser match. It holds US electric, gas and water companies, while VNQ holds US real estate investment trusts (REITs), companies that own and rent out property.

It charges 0.08% a year, about $8 on $10,000, against $13 for VNQ. It held 31 stocks, against 139 for VNQ.

From September 2004 to October 2026, XLU returned about 9.3% a year and VNQ returned about 7.3% a year. Over about the last five years they often moved together, but not always (correlation 0.65).

Read the [XLU fund page](https://tactfolio.com/etf/xlu.md) for its returns by year and worst drop.

## VNQ versions from other fund companies

Some people keep all their funds with one company. Here is the closest fund to VNQ from each other company on this page:

- **iShares (BlackRock):** [IYR](https://tactfolio.com/etf/iyr.md), iShares U.S. Real Estate ETF (same kind of fund, 0.37% a year)
- **Schwab:** [SCHH](https://tactfolio.com/etf/schh.md), Schwab U.S. REIT ETF (same kind of fund, 0.07% a year)
- **SPDR (State Street):** [XLRE](https://tactfolio.com/etf/xlre.md), State Street Real Estate Select Sector SPDR ETF (same kind of fund, 0.08% a year)

Most brokers let you buy any ETF, whoever runs it. Mutual fund versions, such as a fund company's index mutual fund, are not listed here.

## How to choose between VNQ and its alternatives

- **What it tracks.** A fund on the same index holds the same stocks. A different index can mean different weights, more or fewer holdings, or a different mix.
- **The fee.** The difference is often small. On $10,000, VNQ costs about $13 a year. SCHH costs about $7.
- **History.** An older fund has been through more bad markets, so you can see how far it fell.
- **What you already own.** Two funds that move together add little variety. A fund with a low correlation behaves more on its own.

## Swapping VNQ to harvest a tax loss

Some investors sell a fund at a loss to lower their taxes, then buy a similar fund so they stay invested. This is called tax-loss harvesting.

The IRS wash sale rule blocks the loss if you buy a "substantially identical" security within 30 days before or after the sale. The IRS has not said exactly when two funds count. Funds on the same index are more likely to. Funds on a different index, such as IYR, SCHH or XLRE, are less likely to.

Ask a tax professional before you rely on this. Read the IRS rules in [Publication 550](https://www.irs.gov/publications/p550).

## Test VNQ and its alternatives in a backtest

Tactfolio is a platform where you build rules-based investing strategies, backtest them on decades of real prices, share them, and run them automatically in your own Alpaca account. Open the [builder](https://tactfolio.com/builder), add VNQ and IYR, and see how each would have done on the same dates, or how a mix of both would have done.

## The details

Alternatives are picked from facts, not from returns. First come funds that track the same index as VNQ. Then come funds that hold the same kind of stocks through another index. Last come funds from a close category that make a different bet. Leveraged funds are only listed as alternatives to other leveraged funds.

Within each group, the funds whose daily returns moved most like VNQ over about the last five years come first. Returns and worst drops use Tactfolio's stored daily prices, adjusted for splits, with dividends reinvested. Each alternative is measured with VNQ only on days both traded. Read [what a backtest simulates](https://tactfolio.com/docs/backtests.md) for more on these measures.

## Research and test it

- [Portfolio rebalancing](https://tactfolio.com/learn/portfolio-rebalancing): What portfolio rebalancing is, why a 60/40 mix drifts, calendar vs threshold methods, and how taxes and costs fit in.
- [What is an ETF](https://tactfolio.com/learn/what-is-an-etf): An ETF is a fund that trades like a stock. Learn how ETFs work, what they cost, the main types, and the risks, with SEC sources.
- [ETF screener](https://tactfolio.com/screener.md): A free ETF screener for 162 US-listed funds. Filter by type, issuer and fee, sort by returns or worst drop, and compare funds side by side.
- [ETF expense ratio](https://tactfolio.com/learn/etf-expense-ratio): What an ETF expense ratio is, how the fund charges it, and how 0.03% vs 1% adds up over 10 and 30 years, with real fund examples.
- [Backtest a portfolio](https://tactfolio.com/trading-tools/backtest-portfolio): Backtest a portfolio of US stocks and ETFs. Enter tickers and shares, pick when to rebalance, and get the results with a link to share.
- [Backtesting](https://tactfolio.com/backtesting): Free backtesting software for stocks, ETFs, and crypto perps.

## Common questions

### What ETF is most similar to VNQ?

IYR is the closest. IYR also holds US real estate investment trusts (REITs), companies that own and rent out property. It tracks the Dow Jones U.S. Real Estate Capped Index, while VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index. Over about the last five years they moved almost exactly together.

### Is there a cheaper alternative to VNQ?

Yes. SCHH charges 0.07% a year, XLRE charges 0.08% a year and XLU charges 0.08% a year, against 0.13% for VNQ. On $10,000 that is about $7 a year instead of $13.

### Is VNQ or IYR better?

Neither is better for everyone. From September 2004 to October 2026, VNQ returned about 7.3% a year and IYR returned about 6.5% a year. VNQ charges 0.13% a year and IYR charges 0.37%. Past returns do not tell you what comes next.

### What if I had put $10,000 in VNQ 10 years ago?

It would have grown to about $16,445 by October 16, 2026, with dividends reinvested. That is about 5.1% a year. Past returns do not tell you what comes next.

## Sources

- [Vanguard: Vanguard Real Estate ETF fund page](https://investor.vanguard.com/investment-products/etfs/profile/vnq)
- [iShares (BlackRock): iShares U.S. Real Estate ETF fund page](https://www.ishares.com/us/products/239520/ishares-u-s-real-estate-etf)
- [Schwab: Schwab U.S. REIT ETF fund page](https://www.sec.gov/Archives/edgar/data/1454889/000088454626000300/c497k.htm)
- [SPDR (State Street): State Street Real Estate Select Sector SPDR ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-real-estate-select-sector-spdr-etf-xlre)
- [SPDR (State Street): State Street SPDR Dow Jones Global Real Estate ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-spdr-dow-jones-global-real-estate-etf-rwo)
- [SPDR (State Street): State Street SPDR Dow Jones International Real Estate ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-spdr-dow-jones-international-real-estate-etf-rwx)
- [Vanguard: Vanguard Utilities ETF fund page](https://investor.vanguard.com/investment-products/etfs/profile/vpu)
- [SPDR (State Street): State Street Utilities Select Sector SPDR ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-utilities-select-sector-spdr-etf-xlu)
- [IRS Publication 550: wash sales](https://www.irs.gov/publications/p550)

> Not financial advice. Tactfolio is a research and automation tool. It is not a broker or a financial adviser. This page is for education only. Backtests are hypothetical. They show how rules would have done on past prices, not how they will do. All investing involves risk, including losing the money you put in.