Vanguard Real Estate ETF (VNQ) charges a higher fee, offers a larger assets under management (AUM) base, and pays a higher yield, while Schwab U.S. REIT ETF (SCHH) is more affordable and has a slightly smaller drawdown.
Both SCHH and VNQ provide broad exposure to U.S. real estate investment trusts (REITs), aiming to track the performance of publicly traded property companies. This comparison highlights key differences in cost, yield, risk, and portfolio makeup to help investors weigh each ETF’s appeal for diversified real estate exposure.
Snapshot (cost & size)
| Metric | SCHH | VNQ |
|---|---|---|
| Issuer | Schwab | Vanguard |
| Expense ratio | 0.07% | 0.13% |
| 1-yr return (as of 2025-12-12) | -1.97% | -1.15% |
| Dividend yield | 3.03% | 3.86% |
| Beta | 1.16 | 1.20 |
| AUM | $8.48 billion | $65.38 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
SCHH is the more affordable option with a lower expense ratio, while VNQ may appeal to income-focused investors thanks to its higher payout.
Performance & risk comparison
| Metric | SCHH | VNQ |
|---|---|---|
| Max drawdown (5 y) | -33.30% | -34.48% |
| Growth of $1,000 over 5 years | $1,118 | $1,053 |
What's inside
VNQ tracks a wide r of U.S. REITs with 158 holdings and over 21 years of history. Its portfolio is nearly all real estate, with small allocations to communication services and cash. The largest positions are Welltower (NYSE:WELL), Prologis (NYSE:PLD), and American Tower (NYSE:AMT), together making up more than 20% of assets. There are no leveraged, currency-hedged, or ESG overlays to be aware of.
SCHH also focuses on U.S. real estate, holding 124 companies and maintaining a pure-play sector exposure. Its top holdings mirror VNQ with Welltower, Prologis, and American Tower leading the list, but with slightly different weights. Both funds are passively managed and seek to broadly represent the listed U.S. REIT universe.
What this means for investors
REIT ETFs can look interchangeable until rates move and differences in property economics start to matter. Both VNQ and SCHH provide broad U.S. real estate exposure, but they assemble that exposure differently, which becomes apparent when conditions tighten.
VNQ is the category’s anchor. Its larger asset base and longer track record make it the default reference point for many real estate investors, and its current income profile reflects that role. That scale comes with a higher fee and noticeable concentration in the largest REITs, which can steer results during shorter stretches. SCHH takes a leaner path. It follows a tighter REIT-only index, charges less, and holds fewer names, producing a cleaner expression of REIT beta with slightly different drawdown characteristics when the sector is under pressure. The overlap among top holdings is significant, but small structural differences compound over time.
For investors, the distinction is defined by how real estate is position within the broader portfolio. VNQ suits those who find comfort in scale, familiarity, and seeing income play a visible role alongside price movement. SCHH speaks to investors who prefer the same core exposure with less drag, even if that means holding a simpler, more tightly defined portfolio. Over a full cycle, the difference is felt less in any single year and more in the quiet accumulation of fees, cash flow, and how concentrated exposure feels when real estate sentiment turns.
Glossary
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover its operating costs.
Dividend yield: The annual dividends paid by a fund or stock, expressed as a percentage of its current price.
REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-producing real estate and typically pays out most income as dividends.
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
AUM (Assets Under Management): The total market value of assets that a fund or investment company manages on behalf of investors.
Beta: A measure of a fund’s volatility compared to the overall market, typically the S&P 500.
Drawdown: The decline from a fund’s peak value to its lowest point over a specific period, showing potential loss.
Passive management: An investment strategy that aims to replicate the performance of a market index rather than actively selecting securities.
Sector exposure: The proportion of a fund’s assets invested in specific industries or sectors.
Pure-play: A fund or company focused exclusively on a single industry or sector.
Leveraged ETF: An ETF that uses financial derivatives and debt to amplify the returns of an underlying index.
ESG overlay: An investment approach that incorporates environmental, social, and governance criteria into portfolio selection or management.
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