VNQ vs SCHH: REIT ETF Comparison

VNQ vs SCHH: Which REIT ETF Is Better?

Comparisons6 min readUpdated March 17, 2026

Key Takeaways

✓VNQ is the largest REIT ETF with ~$60B in assets; SCHH is smaller but competitive.
✓SCHH charges 0.07% versus VNQ's 0.12% — a meaningful fee advantage.
✓VNQ includes a broader range of REITs; SCHH uses a Dow Jones US Select REIT Index.
✓Both provide similar yields in the 3-4% range from real estate investment trusts.

Real estate ETFs provide exposure to REITs (Real Estate Investment Trusts) — companies that own and operate income-producing properties. VNQ and SCHH are the two most popular choices, with more similarities than differences.

Index and Holdings

VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index, holding approximately 160 REITs across all property types. SCHH tracks the Dow Jones US Select REIT Index, which is somewhat narrower and focuses more on equity REITs that own physical properties. Both include data centers, cell towers, warehouses, apartments, and retail properties.

Fee Comparison

SCHH charges 0.07% versus VNQ's 0.12%. Over a long holding period, this 0.05% difference is meaningful. On a $100,000 REIT allocation, SCHH saves $50 per year. Over 20 years with compounding, the savings exceed $2,000. For identical strategies, always prefer the lower-cost option.

Yield and Income

Both yield 3-4% from REIT dividends, with minor variations. REIT dividends are generally taxed as ordinary income, making both funds better suited for tax-advantaged accounts. Monthly distribution amounts fluctuate with property market conditions and interest rates. Compare the latest yield data at VNQ vs SCHH comparison page.

The Verdict

SCHH's lower fee makes it the slight favorite for cost-conscious long-term holders. VNQ's significantly larger AUM provides better liquidity for large investors. Both are excellent choices for adding real estate diversification to a portfolio. The difference between them will likely not meaningfully impact your long-term results. Learn more about portfolio diversification at our education center.

Frequently Asked Questions

Which has a higher yield, VNQ or SCHH?

Yields are generally comparable in the 3-4% range, with minor variations quarter to quarter. VNQ's broader index sometimes captures higher-yielding specialty REITs. The difference is typically under 0.2% and should not be the primary selection criterion.

Should I hold REIT ETFs in a taxable account?

REIT dividends are generally taxed as ordinary income, not at the lower qualified dividend rate. Holding REIT ETFs in tax-advantaged accounts (IRA, 401k) is more tax-efficient. If you must hold in a taxable account, the qualified business income deduction may offset some of the tax burden.

How do REIT ETFs perform when interest rates rise?

REIT ETFs typically underperform during rate-hiking cycles because higher rates increase borrowing costs and make bond yields more competitive with REIT dividends. However, if rates rise due to strong economic growth, rising rents can offset the rate headwind. The long-term track record of REITs is strong across various rate environments.