ETF Versus

VNQ vs XLI

Vanguard Real Estate Index Fund ETF Shares vs State Street Industrial Select Sector SPDR ETF

Last updated: 2026-04-02

VNQ Vanguard

Vanguard Real Estate Index Fund ETF Shares (VNQ) is an exchange-traded fund issued by Vanguard that provides exposure to U.S. real estate investment trusts (REITs) and real estate companies. It charges a low expense ratio of 0.12%. The fund offers an attractive dividend yield of 3.89%. Launched in 2004, the fund has a 22-year track record.

AUM: $65.8B ER: 0.12% Yield: 3.89% Since: 2004-09-29
XLI State Street

State Street Industrial Select Sector SPDR ETF (XLI) is an exchange-traded fund issued by State Street that provides exposure to us sector - industrials securities. It charges a low expense ratio of 0.09%. The fund offers a moderate dividend yield of 1.25%. Launched in 1998, the fund has a 28-year track record.

AUM: $25.6B ER: 0.09% Yield: 1.25% Since: 1998-12-22

Quick Verdict

XLI has a slightly lower expense ratio (0.09% vs 0.12%), saving about $59 per $10,000 over 10 years. Over the past year, XLI has significantly outperformed with a 23.4% return vs -1.5%. Income investors may prefer VNQ for its higher yield (3.9% vs 1.3%).

Key Metrics

Metric VNQ XLI
Expense Ratio 0.12% 0.09%
Dividend Yield 3.9% 1.3%
Fund Family Vanguard State Street
Category US Real Estate US Sector - Industrials

Performance Chart

Indexed to 100 at start (5-year comparison)

75 96 117 138 159 180 2021-04 2022-06 2023-10 2024-12 2026-04
VNQ -4.4%
XLI +64.2%

Performance Comparison

Period VNQ XLI Difference
1 Month -5.96% -6.38% +0.42%
3 Months +1.37% +3.96% -2.59%
6 Months -0.92% +5.87% -6.79%
YTD +1.37% +3.96% -2.59%
1 Year -1.54% +23.44% -24.98%
3 Years +8.92% +62.04% -53.12%
5 Years -4.43% +64.24% -68.67%

Fee Impact Over Time

Estimated fee cost difference assuming 8% annual returns

Investment Period VNQ Fees XLI Fees You Save
$10,000 10 years $239 $179 $59
$10,000 20 years $1,025 $771 $254
$10,000 30 years $3,301 $2,486 $815
$50,000 10 years $1,193 $896 $297
$50,000 30 years $16,504 $12,428 $4,076
$100,000 30 years $33,007 $24,855 $8,152

Risk Metrics

Based on 5 years of daily returns

Metric VNQ XLI
Annualized Volatility 18.9% 17.2%
Max Drawdown -38.8% -22.7%
Sharpe Ratio -0.19 0.40

Dividend Comparison

Metric VNQ XLI
Annual Dividend (per share) $3.49 $2.05
Dividend Yield 3.89% 1.25%
Distribution Frequency Quarterly Quarterly

Top Holdings

0 of top 10 holdings overlap (0% overlap in top holdings)

VNQ Top Holdings

NameWeight
Vanguard Real Estate II Index Fund1451.51%
Welltower Inc707.58%
Prologis Inc688.22%
American Tower Corp476.51%
Equinix Inc456.02%
Simon Property Group Inc354.53%
Digital Realty Trust Inc321.26%
Realty Income Corp314.90%
CBRE Group Inc287.69%
Public Storage247.55%

XLI Top Holdings

NameWeight
General Electric Co680.74%
Caterpillar Inc561.69%
RTX Corp515.19%
GE Vernova Inc371.52%
Boeing Co/The356.20%
Uber Technologies Inc355.71%
Union Pacific Corp287.47%
Honeywell International Inc259.50%
Eaton Corp PLC259.19%
Deere & Co245.23%

Which One Should You Choose?

Choose XLI if...

you want the lowest fees and plan to buy and hold long-term. Over decades, the expense ratio difference compounds significantly.

Choose XLI if...

recent performance momentum matters to your strategy. Note that past performance doesn't guarantee future results.

Choose VNQ if...

you prioritize dividend income and want higher regular distributions from your portfolio.

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