VEA vs VNQ: Correlation & Overlap
Vanguard FTSE Developed Markets ETF (VEA) and Vanguard Real Estate ETF (VNQ) show a moderate relationship: their 3-year correlation of weekly returns is 0.56. The two funds also share 0.1% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and VNQ?
On 3 years of weekly data the VEA/VNQ correlation comes out at 0.56, moderate. The past 12 months show a weaker link (0.45) than the 3-year average (0.56). The 5-year figure is 0.66, and annualized covariance runs at 139.5 %².
Within VEA's tracked universe of 107 assets, VNQ comes in at #74 by 3-year correlation. Correlation aside, the last 12 months split them widely, with VEA ahead by 18.2 points (+28.5% versus +10.3%). The rolling one-year correlation moved between 0.45 and 0.84 over the past three years, a moderate range.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
VEA vs VNQ: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +28.5% | +10.3% |
| 5-year return | +63.5% | +9.5% |
| Volatility (ann.) | 15.1% | 16.6% |
| Beta vs S&P 500 | 0.79 | 0.59 |
| Max drawdown (3Y) | -13.5% | -17.5% |
| Dividend yield | 2.56% | 3.51% |
| Expense ratio | 0.03% | 0.13% |
| Assets under management | $314.9B | $73.1B |
| Sector / category | ETF · International | ETF · Real Estate |
On the fund side, VEA sits in the Foreign Large Blend category at Vanguard, with $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Portfolio overlap between VEA and VNQ
The two portfolios are largely distinct, with 13 holdings in common adding up to 0.1% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VEA | Weight in VNQ |
|---|---|---|
| LAND | 0.03% | 0.02% |
| CWK | 0.01% | 0.16% |
| FR | 0.01% | 0.46% |
| ARE | 0.01% | 0.42% |
| DOC | 0.01% | 0.79% |
| SAFE | 0.01% | 0.04% |
| ALX | 0.01% | 0.03% |
| EPR | 0.00% | 0.25% |
| SPG | 0.00% | 3.89% |
| REG | 0.00% | 0.69% |
| SKT | 0.00% | 0.24% |
| EQR | 0.00% | 1.17% |
| ELS | 0.00% | 0.63% |
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 13 common positions shown.
Year-by-year returns
| Year | VEA | VNQ |
|---|---|---|
| 2022 | -15.3% | -26.3% |
| 2023 | +17.9% | +11.9% |
| 2024 | +3.1% | +4.8% |
| 2025 | +35.2% | +3.2% |
| 2026 | +18.3% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and VNQ good diversifiers for each other?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VEA and VNQ?
As of 2026-08-27, the correlation of weekly returns between VEA and VNQ is 0.56 over 3 years, 0.45 over 1 year and 0.66 over 5 years.
Is VNQ a good diversifier for VEA?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VEA and VNQ overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.1% by weight over 13 common positions.
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Related comparisons
Hubs: VEA correlations · VNQ correlations
