VNQI vs. RWX: Which International Real Estate ETF Belongs in Your Portfolio?

Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) stands out for its lower fees and higher yield, while State Street SPDR Dow Jones International Real Estate ETF (NYSEMKT:RWX) offers a more concentrated international property portfolio and a higher recent one-year return.

Both VNQI and RWX target the international real estate sector, offering exposure to a wide range of property companies outside the United States. This comparison looks at how these two funds stack up on cost, yield, performance, and portfolio construction to help investors navigate their differences.

Snapshot (cost & size)

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.

VNQI charges lower fees, with an expense ratio roughly one-fifth that of RWX, and it also pays a higher dividend yield, which may appeal to cost- and income-focused investors.

Performance & risk comparison

What’s inside

RWX tracks the Dow Jones Global ex-U.S. Select Real Estate Securities Index, focusing on international property companies with 121 holdings. Top names include Mitsui Fudosan Co Ltd (8801.T), Swiss Prime Site Reg (SIX: SPSN.SW), and Scentre Group (ASX: SCG.AX). These three holdings make up about 13% of the portfolio, with the largest position – Mitsui Fudosan – alone accounting for roughly 8%. The fund has a 19+ year track record and offers a relatively concentrated approach to global real estate.

VNQI, by contrast, casts a much wider net with more than 700 holdings. Its three largest positions are Mitsubishi Estate Co Ltd (8802.T), Goodman Group (ASX: GMG.AX), and Mitsui Fudosan Co Ltd – with these combined holdings accounting for about 10% of its portfolio. Investors looking for broader diversification may find VNQI’s portfolio construction appealing.

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What this means for investors

For retail investors, the choice between VNQI and RWX ultimately comes down to what you’re optimizing for – and the differences here are meaningful enough to matter.

The fee difference alone is hard to ignore. VNQI’s expense ratio is about one-fifth of RWX’s, which means that over time, more of your returns stay in your pocket. Over a decade or more, that kind of cost advantage can quietly compound into a significant difference-maker. Add in VNQI’s higher dividend yield, and the case for income-focused investors becomes even clearer.

That said, RWX isn’t without its merits. Its more concentrated portfolio – just 121 holdings versus VNQI’s more than 700 – means each position carries more individual weight. For investors who want targeted exposure to a smaller set of high-conviction international property names, that focused approach has its appeal.

It’s worth noting that international real estate as a whole has faced headwinds in recent years, including currency pressures, slower economic growth in parts of Europe and Asia, and rising global interest rates that tend to weigh on property valuations. Both funds operate in that same environment – but VNQI’s broader diversification offers a bit more of a cushion if specific markets or sectors underperform.

For most long-term, cost-conscious investors, VNQI’s combination of lower fees, higher yield, and wider diversification makes it the more compelling choice among these two international real estate options.