Friday Fund – ETF VNQ – Vanguard Real Estate Index Fund ETF Shares

Some investors like to have ETFs focused on specific sectors. One popular sector for dividend investors is real estate. Real estate investments often are called REITs. REIT stands for Real  Estate Investment Trust. A real estate investment trust (REIT) is a closed-end investment company. Each company can own assets like buildings, land and real estate securities. REITs sell on the major stock market exchanges just like common stock. Some ETFs, therefore, invest in several REITs.

Here are some key things about this ETF:

Expense Ratio              0.12% – This is acceptable. FREL is only 0.084%

Assets Under Management (AUM)      56.74B – Very large ETF. FREL is very small.

ETF Category                   Real Estate Sector Equity

Net Asset Value (NAV)    $80.65

Total Holdings                 181 – very good diversification (FREL has 166)

Dividend yield                4.43% – A good yield. Compare to  FREL:  is 5.43%.

5-Year Returns                8.68% – FREL does not have 5-year returns yet.

Ranking (VNQ – Real-Time SMART Grade™) on is #1 of 25 in Real Estate ETFs.

The XTF.COM rating for VNQ is 9.3 out of 10.0 with no Morningstar stars.

The XTF.COM rating for FREL is 8.1 out of 10.0 and four Morningstar stars.

You can find the XTF, Morningstar and other ratings when you are signed on to a Fidelity Investments accounts. I prefer the XTF rating over Morningstar.

Recommendation: I would only buy VNQ over FREL for a couple of reasons:

  1. Better diversification
  2. Larger ETF, so probably easier to sell with higher trading volume.
  3. Although there is a $4.95 trading commission, that is immaterial for larger purchases.
  4. The yield is very good.
  5. Better XTF rating and better rating


ETFs similar to VNQ include FREL, IYR, USRT and FRI