IYR vs VNQ Stock Comparison: AI Score, Valuation, Performance and Upside
IYR and VNQ are both broad US REIT ETFs with similar holdings but meaningfully different expense ratios. VNQ at 0.13% is roughly one-third the cost of IYR at 0.40%. Both provide diversified exposure to US commercial real estate through REITs. The primary reason to choose one over the other is cost — VNQ's lower expense ratio provides a structural long-term advantage that compounds significantly over 20+ year holding periods.
IYR vs VNQ is essentially the same US REIT market exposure at meaningfully different cost — VNQ at 0.13% vs IYR at 0.40% creates a 0.27% annual headwind for IYR investors that compounds into meaningful wealth difference over long periods, making VNQ the preferred low-cost REIT allocation for most investors.
VNQ holds the edge across 4 of 5 key metrics in this comparison. VNQ has delivered stronger 1-year price return (+10.54% vs +8.72% for IYR).
- →hold iShares/BlackRock ETFs as a platform preference and receive commission-free trading on IYR at their brokerage
- →value IYR's long track record since 2000 providing extensive historical data through the 2008 financial crisis and COVID real estate stress
- →want broad REIT exposure and are willing to pay 0.40% for the iShares platform relationship
- →are comfortable with the 0.27% annual cost premium vs VNQ given platform or liquidity preferences
- →prefer the lower-cost REIT ETF at 0.13% vs IYR's 0.40% — the primary reason most investors choose VNQ over IYR
- →value Vanguard's structural cost-minimization advantages for building a low-expense REIT allocation
- →want the REIT ETF used by most institutional and retail investors as the de facto real estate index standard
- →are comfortable with Vanguard's REIT index methodology and the commission-free availability at most major brokerages
| Metric | IYR | VNQ |
|---|---|---|
| ETF score | 26.0 | 52.0 |
| Latest close | $100.45 | $95.56 |
| 1M return | -0.31% | +0.29% |
| 6M return | +7.86% | +9.02% |
| 1Y return | +8.72% | +10.54% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | IYR | VNQ |
|---|---|---|
| 1Y ago | $11.13K (+11.3%) started 2025-06-18 | $11.5K (+15.0%) started 2025-06-18 |
| 5Y ago | $12.9K (+29.0%) started 2021-06-18 | $13.99K (+39.9%) started 2021-06-18 |
| 10Y ago | $24.16K (+141.6%) started 2016-06-20 | $26.84K (+168.4%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | IYR | VNQ |
|---|---|---|
| Expense ratio | 0.38% | 0.13% |
| Total assets (AUM) | $4.87B | $69.8B |
| Dividend yield | 2.22% | 3.64% |
| Trailing P/E | 28.39 | 30.54 |
| Beta | 0.99 | 1.00 |
| 52-week change | 8.72% | 10.54% |
| Metric | IYR | VNQ |
|---|---|---|
| 1Y return | +8.72% | +10.54% |
| 6M return | +7.86% | +9.02% |
| 1M return | -0.31% | +0.29% |
| 1Y Sharpe ratio | 0.35 | 0.47 |
| Beta | 0.99 | 1.00 |
| Dividend yield | 2.22% | 3.64% |
| 5Y CAGR | +2.39% | +2.58% |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | IYR | VNQ |
|---|---|---|---|
| 1Y | Growth | +8.72% | +10.54% |
| CAGR | +8.73% | +10.54% | |
| Sharpe ratio | 0.35 | 0.47 | |
| Max drawdown | 8.54% | 8.34% | |
| Max daily drop | 3.13% | 3.10% | |
| Max wkly drop | 4.96% | 4.81% | |
| 5Y | Growth | +12.54% | +13.58% |
| CAGR | +2.39% | +2.58% | |
| Sharpe ratio | -0.02 | -0.01 | |
| Max drawdown | 33.74% | 34.48% | |
| Max daily drop | 4.93% | 5.00% | |
| Max wkly drop | 11.87% | 12.07% | |
| 10Y | Growth | +70.20% | +65.68% |
| CAGR | +5.47% | +5.18% | |
| Sharpe ratio | 0.14 | 0.13 | |
| Max drawdown | 42.32% | 42.40% | |
| Max daily drop | 16.87% | 17.73% | |
| Max wkly drop | 24.93% | 24.91% |
| Category | IYR | VNQ |
|---|---|---|
| Fund name | iShares U.S. Real Estate ETF | Vanguard Real Estate Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratio | 0.38% | 0.13% |
| Total assets (AUM) | $4.87B | $69.8B |
| Dividend yield | 2.22% | 3.64% |
- →Comprehensive US REIT exposure across all property types — data centers, apartments, industrial warehouses, retail, and specialty healthcare REITs
- →Long track record since 2000 with extensive historical performance data through multiple real estate cycles
- →iShares/BlackRock platform provides institutional-quality ETF with deep liquidity
- →0.13% expense ratio provides the same REIT market exposure as IYR at one-third the cost — significant long-term compounding advantage
- →Tracks MSCI US Real Estate index with comprehensive REIT coverage and well-established index methodology
- →Vanguard's structural advantages (investor-owned fund company) support continued cost minimization
- →0.40% expense ratio is significantly higher than VNQ's 0.13% — meaningful cost difference on large REIT allocations over time
- →Rising interest rates compress REIT valuations — REITs use leverage and high dividend yields compete with Treasury bonds for income investors
- →Data center and cell tower REIT classification (sometimes in communication services rather than real estate) affects composition
- →Rising interest rates compress REIT valuations — same rate sensitivity as IYR; VNQ's lower cost does not eliminate REIT rate risk
- →Real estate cycles can produce prolonged drawdowns — COVID reduced office and retail REIT values significantly
- →Individual REIT selection within VNQ means concentration in largest REITs (Prologis, American Tower) by market cap weighting
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