When it comes to international real estate ETFs, investors have a choice between Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) and State Street SPDR Dow Jones International Real Estate ETF (NYSEMKT:RWX). These two funds offer exposure to a wide range of property companies outside the United States, but they have distinct differences that investors should consider.
One of the key differences between VNQI and RWX is their fees and yield. VNQI has a lower expense ratio of 0.12% compared to RWX’s 0.59%. Additionally, VNQI offers a higher dividend yield of 4.3% compared to RWX’s 3.4%. For cost- and income-focused investors, VNQI may be the more appealing choice due to its lower fees and higher yield.
In terms of performance, RWX has a higher recent one-year return of 14.1% compared to VNQI’s 12.9%. However, VNQI has a lower max drawdown over five years at -35.77% compared to RWX’s -35.89%. Both funds have seen growth of $1,000 over five years, with VNQI at $820 and RWX at $803.
When it comes to portfolio construction, RWX tracks the Dow Jones Global ex-U.S. Select Real Estate Securities Index and has a more concentrated approach with 121 holdings. Top holdings include Mitsui Fudosan Co Ltd, Swiss Prime Site Reg, and Scentre Group. On the other hand, VNQI has over 700 holdings and a wider diversification strategy. Its top holdings include Mitsubishi Estate Co Ltd, Goodman Group, and Mitsui Fudosan Co Ltd.
Overall, for long-term, cost-conscious investors, VNQI may be the more compelling choice due to its combination of lower fees, higher yield, and broader diversification. However, RWX’s more concentrated approach may appeal to investors looking for targeted exposure to a smaller set of high-conviction international property names. Ultimately, the choice between VNQI and RWX depends on what investors are optimizing for and their investment goals.
For more information on ETF investing, you can check out the full guide here. Remember to do your own research and consult with a financial advisor before making any investment decisions.
