The Vanguard Real Estate ETF (NYSEMKT:VNQ) and iShares Select U.S. REIT ETF (NYSEMKT:ICF) both target U.S. real estate investment trusts, but ICF is pricier, more concentrated, and has recently delivered stronger total returns despite a lower yield.

Both VNQ and ICF provide exposure to U.S. REITs, making them candidates for investors seeking real estate diversification within their portfolios. This comparison looks at how the two funds stack up on cost, yield, performance, risk, portfolio makeup, and trading characteristics.

Metric

VNQ

ICF

Issuer

Vanguard

IShares

Expense ratio

0.13%

0.32%

1-yr return (as of 2026-03-16)

1.3%

4.2%

Dividend yield

3.63%

2.6%

Beta

1.15

0.98

AUM

$69.61 billion

$2.11 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

ICF is notably more expensive than VNQ and delivers a lower income payout, but it has outperformed on recent total return. VNQ may appeal to cost-conscious, income-focused investors, while ICF could suit those prioritizing recent performance.

Metric

VNQ

ICF

Max drawdown (5 y)

-34.48%

-34.75%

Growth of $1,000 over 5 years

$1,003

$1,117

ICF holds just 30 stocks, focusing on large U.S. REITs and tracking a 100% real estate allocation. Its largest positions are Equinix Reit Inc (NASDAQ:EQIX), Welltower Inc (NYSE:WELL), and American Tower Reit Corp (NYSE:AMT). The fund has been around for over 25 years, offering a concentrated approach to the sector with no leverage, ESG, or other structural quirks.

VNQ casts a much wider net, holding 158 names across the real estate sector with minor exposure to communication services and technology. Its top holdings—Welltower Inc (NYSE:WELL), Prologis Inc (NYSE:PLD), and Equinix Inc (NASDAQ:EQIX)overlap with ICF but are held alongside a broader set of REITs, resulting in less concentration risk for investors seeking a more diversified portfolio.

For more guidance on ETF investing, check out the full guide at this link.

In U.S. REIT investing, returns often vary across the sector. At times, a small group of large, specialized REITs can drive market leadership. This dynamic matters because when just a few key REITs are responsible for most gains or losses, portfolios can experience greater swings in performance depending on their exposure to these leaders. This dynamic is central to the difference between the Vanguard Real Estate ETF and the iShares Select U.S. REIT ETF.

VNQ offers broad exposure across many REITs, covering a wide range of property types and companies. This approach provides returns that reflect the overall U.S. REIT sector, which reduces reliance on individual companies or subsectors. In contrast, ICF focuses on a smaller group of large-cap REITs, with greater emphasis on data centers, cell towers, and healthcare properties. This structure can boost performance when these leaders excel, but it also increases dependence on a limited set of companies.

For investors, the choice is whether you are seeking real estate exposure that mirrors the broader U.S. REIT market or lean more heavily on its largest leaders. VNQ offers lower-cost access to the full sector, which tends to support diversification and a more balanced return profile across the REIT market. ICF, by contrast, holds a more selective portfolio, where results are more directly shaped by the largest REIT franchises and the specialized segments they dominate.

Before you buy stock in iShares Trust - iShares Select U.s. REIT ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Select U.s. REIT ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $510,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,949!*

Now, it’s worth noting Stock Advisor’s total average return is 929% — a market-crushing outperformance compared to 186% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of March 19, 2026.

Eric Trie has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Tower, Equinix, Prologis, and Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.

Broad REIT Exposure or Concentration in Sector Leaders? VNQ vs. ICF was originally published by The Motley Fool