REM vs VNQ Stock Comparison: AI Score, Valuation, Performance and Upside
REM and VNQ serve very different income investor needs. REM's mortgage REITs use leverage on mortgage securities for 8-12%+ yields but with extreme rate sensitivity and frequent dividend cuts. VNQ's equity REITs own physical properties for 3-4% income with more stable dividends and long-term appreciation. REM is a maximum income vehicle with significant principal risk; VNQ is a more complete real estate market exposure with more stable income and total return potential.
REM vs VNQ — REM (the mortgage REIT ETF with Annaly, AGNC, and other mREITs providing 8-12%+ dividend yields from interest rate spread investing) versus VNQ (the equity REIT ETF with 170+ property-owning REITs across warehouse, cell tower, data center, and residential properties providing 3-4% income and real asset appreciation).
VNQ holds the edge across 4 of 5 key metrics in this comparison. VNQ has delivered stronger 1-year price return (+10.73% vs -14.62% for REM).
- prioritize maximum current income and are comfortable with principal volatility and dividend cut risk during rate cycles
- believe the yield curve will steepen (long rates exceeding short rates) — widening mREIT spreads and improving REM dividend sustainability
- use REM as a tactical income vehicle in favorable rate environments rather than a long-term core holding
- understand that 8-12% yields imply significant risk — mREIT book value erosion and dividend cuts in rising rate environments are expected outcomes
- want diversified US real estate exposure across property types — warehouses, towers, data centers, apartments, and commercial real estate in one ETF
- value real asset backing from physical property ownership providing inflation hedge and long-term appreciation beyond just income
- prefer 3-4% stable dividend income over REM's 8-12% higher-risk income — lower yield but more reliable dividend track record across rate cycles
- are comfortable with equity REIT interest rate sensitivity, office property headwinds from remote work, and general real estate cycle exposure
| Metric | REM | VNQ |
|---|---|---|
| ETF scorei | 24.1 | 24.8 |
| Latest closei | $17.06 | $95.01 |
| 1M returni | -3.94% | +6.16% |
| 3M returni | -19.41% | -3.12% |
| 6M returni | -21.45% | +0.96% |
| 1Y returni | -14.62% | +10.73% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | REM | VNQ |
|---|---|---|
| 1Y ago | $9.39K (-6.1%) started 2025-11-03 | $11.5K (+15.0%) started 2025-11-03 |
| 5Y ago | $12.67K (+26.7%) started 2021-11-04 | $13.06K (+30.6%) started 2021-11-04 |
| 10Y ago | $41.85K (+318.5%) started 2016-11-04 | $29.14K (+191.4%) started 2016-11-04 |
Hypothetical — past performance does not guarantee future results.
| Metric | REM | VNQ |
|---|---|---|
| Expense ratioi | 0.48% | 0.13% |
| Total assets (AUM)i | $457.76M | $66.42B |
| Dividend yieldi | 10.88% | 3.80% |
| Trailing P/Ei | 5.34 | 30.07 |
| Betai | 1.31 | 0.96 |
| 52-week change | -14.62% | 10.73% |
| Metric | REM | VNQ |
|---|---|---|
| 1Y returni | -14.62% | +10.73% |
| 6M returni | -21.45% | +0.96% |
| 3M returni | -19.41% | -3.12% |
| 1M returni | -3.94% | +6.16% |
| 1Y Sharpe ratio | -1.02 | 0.49 |
| Betai | 1.31 | 0.96 |
| Dividend yieldi | 10.88% | 3.80% |
| 5Y CAGR | -6.56% | +1.07% |
Over the past year, REM and VNQ have moved moderately in the same direction (correlation of 0.58), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | REM | VNQ |
|---|---|---|---|
| 1Y | Growthi | -14.62% | +10.73% |
| CAGRi | -14.63% | +10.74% | |
| Volatilityi | 18.28% | 13.75% | |
| Sharpe ratioi | -1.02 | 0.49 | |
| Sortino ratioi | -1.34 | 0.71 | |
| Max drawdowni | 26.33% | 11.38% | |
| Current drawdowni | 24.96% | 5.07% | |
| Avg drawdowni | 7.44% | 2.90% | |
| Ulcer Indexi | 9.84% | 4.08% | |
| Max daily dropi | 4.53% | 3.10% | |
| Max wkly dropi | 6.13% | 4.81% | |
| 5Y | Growthi | -28.74% | +5.49% |
| CAGRi | -6.56% | +1.07% | |
| Volatilityi | 23.72% | 18.90% | |
| Sharpe ratioi | -0.36 | -0.09 | |
| Sortino ratioi | -0.48 | -0.12 | |
| Max drawdowni | 43.31% | 34.48% | |
| Current drawdowni | 29.82% | 5.07% | |
| Avg drawdowni | 21.66% | 14.71% | |
| Ulcer Indexi | 23.11% | 17.02% | |
| Max daily dropi | 9.32% | 5.00% | |
| Max wkly dropi | 18.34% | 12.07% | |
| 10Y | Growthi | +0.62% | +79.51% |
| CAGRi | +0.06% | +6.03% | |
| Volatilityi | 28.40% | 20.67% | |
| Sharpe ratioi | -0.01 | 0.17 | |
| Sortino ratioi | -0.02 | 0.23 | |
| Max drawdowni | 68.52% | 42.40% | |
| Current drawdowni | 35.31% | 5.07% | |
| Avg drawdowni | 19.53% | 10.22% | |
| Ulcer Indexi | 24.45% | 13.68% | |
| Max daily dropi | 23.31% | 17.73% | |
| Max wkly dropi | 47.82% | 24.91% |
| Category | REM | VNQ |
|---|---|---|
| Fund name | iShares Mortgage Real Estate Capped ETF | Vanguard Real Estate Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.48% | 0.13% |
| Total assets (AUM)i | $457.76M | $66.42B |
| Dividend yieldi | 10.88% | 3.80% |
- Very high dividend yield (8-12%+): REM offers income multiples above traditional equity REITs or bond funds — attractive for maximum income generation
- Short-term rate spread exposure: when the yield curve steepens (long rates > short rates), mortgage REIT spreads widen and earnings increase — REM benefits from yield curve normalization
- Agency MBS safety: top mREIT holdings (Annaly, AGNC) primarily own agency-backed MBS with government credit guarantees — credit risk is lower than yield would imply
- Diversified equity REIT exposure across property types: warehouses, cell towers, data centers, self-storage, apartments, offices, healthcare, and malls — full US real estate sector in one ETF
- Real asset backing: VNQ's REITs own physical properties — the underlying real assets provide inflation protection and long-term value appreciation
- More stable income than REM: equity REIT dividends are backed by rental income streams — less volatile than mortgage REIT dividends tied to interest rate spreads
- Extreme interest rate sensitivity: rising short-term rates compress mREIT spreads — the 2022 Fed rate hike cycle was devastating for mREITs, with REM falling 30%+
- Book value erosion risk: when rates rise rapidly, MBS values fall, eroding mREIT book values and leading to dividend cuts
- Dividend cuts are common: mREITs frequently cut dividends during rate cycles — high headline yield often masks dividend reduction risk
- Interest rate sensitivity: equity REITs borrow extensively for property acquisition — rising rates increase borrowing costs and make REIT yields less attractive vs Treasuries
- Office REIT exposure: post-COVID remote work trends have impaired office property values — VNQ's office REIT holdings face secular headwinds from reduced office space demand
- Lower yield than REM: VNQ's 3-4% yield is significantly below REM's 8-12% — investors seeking maximum income must accept VNQ's lower yield vs REM's higher-risk income
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