VNQ vs. ICF: Which REIT ETF Offers Better Value?

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In the financial plains where two titans roam-the iShares Select U.S. REIT ETF (ICF +0.00%) and Vanguard Real Estate ETF (VNQ +0.03%)-the land of opportunity bears different fruits. VNQ, with its frugal stewardship and bountiful yield, speaks to the dirt-under-the-nails investor, while ICF, leaner in number yet heavier in ambition, treads a narrower row. Both till the soil of American real estate, yet their harvests differ in ways that whisper to the patient ear.

Here lies the truth of these instruments: they are plows meant to break the same earth, yet their blades are forged differently. Let us walk the field and see which furrow leads to greener pastures.

Snapshot (cost & size)

Metric ICF VNQ
Issuer iShares Vanguard
Expense ratio 0.32% 0.13%
1-year return (as of 2026-1-2) 1.9% 3.3%
Dividend yield 2.49% 3.86%
AUM $1.9 billion $65.4 billion

The one-year return represents the bread cast upon the waters, returned with interest over twelve moons.

Consider the cost: VNQ’s fee, a mere murmur at 0.13%, leaves more coin in the pocket where it belongs. Its yield, a steady creek compared to ICF’s trickle, sings sweeter to those who live by the dividend’s grace.

Performance comparison

Metric ICF VNQ
Growth of $1,000 over 5 years $1,261 $1,254

What’s inside

VNQ, with 158 holdings as of Dec. 29, 2025, is a tapestry woven from the threads of 158 separate spools. Its crown jewels-Welltower Inc. (WELL +0.72%), Prologis Inc. (PLD +1.09%), and American Tower Corp. (AMT 0.44%)-stand as pillars of health, industry, and steel. Each a fortress in its own right.

ICF, lean and hungry, clings tight to its 30 holdings-a clutch of eggs in few baskets. Its top trio mirrors VNQ’s, yet their weight bends the bough more perilously. Both funds walk barefoot on the earth, unshod by leverage or currency charms, their focus as sharp as a reaper’s blade.

For those who seek the whole story, turn here.

What this means for investors

Since the early aughts, VNQ has marched with a 7.2% annualized gait, outpacing ICF’s 6.9%. In the short sprint and the decade’s long haul, VNQ’s boots have left deeper prints. With both funds bearing similar scars of volatility-a beta like two oxen yoked to the same cart-and five-year drawdowns that carved canyons of 35%, VNQ’s edge glimmers like morning dew.

Its yield, a 3.86% clarion call against ICF’s 2.49% whisper, is the difference between a full larder and an empty shelf. The expense ratio, less than half ICF’s, is a thief’s shadow in the night. Diversification? VNQ’s top ten holdings occupy 40% of its map, while ICF’s ten command 60%-a kingdom’s ransom in too-few hands. Where ICF is a narrow canyon, VNQ is a valley wide enough to plant a thousand seeds.

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Thus, the choice is writ plain: VNQ, the steward who multiplies loaves and fishes, offers more feast for the hungry investor. Lower costs, richer yield, broader roots-these are the marks of a fund that remembers the dustbowl, that walks with the sharecropper, that builds granaries for the lean years. 🌱

Glossary

ETF: A basket of assets, traded like a single ear of corn in the market’s bustling square.
REIT: A trust that sows capital in the soil of brick and mortar, reaping rent as the harvest.
Expense ratio: The price of the plow, measured in percentages.
Dividend yield: The fruit of the vine, divided by the vine’s current height.
AUM: The measure of all seeds sown in a given field.
Beta: The storm’s fury relative to the prairie’s calm.
Max drawdown: The deepest well a fund’s value falls, from highest peak to lowest trough.
Total return: The whole harvest-both grain and chaff-reinvested.
Portfolio diversification: The wisdom of not planting all seeds in one row.
Sector exposure: The share of the field devoted to wheat, barley, or vine.
Concentrated portfolio: A gamble on few crops, where frost can ruin all.
Leverage (in funds): Borrowed wind to fill the sails, often at the mercy of storms.

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2026-01-03 00:32