## [# ETF Of The Week: Real Estate Fund Sees Big Demand](/sections/news/etf-week-real-estate-fund-sees-big-demand)
# ETF Of The Week: Real Estate Fund Sees Big Demand
Why did ‘VNQ’ see its biggest flows ever last month?
[](/contributors/lara-crigger)
[By Lara Crigger](/contributors/lara-crigger)
Mar 08, 2019
Edited by: Lara Crigger
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Among the crowded [real estate ETF](https://www.etf.com/topics/real-estate-etfs) field, the [Vanguard Real Estate ETF (VNQ)](https://www.etf.com/VNQ) reins supreme. With $33 billion in assets under management, the fund is by far and away the largest real estate ETF, and one of the largest ETFs, period.
As Bloomberg Intelligence's [Tom Psarofagis pointed out on Twitter](https://twitter.com/tpsarofagis/status/1103714369848909824), VNQ saw $1.7 billion in net inflows in February, making it the fund's largest month of inflows ever (read: "[February Sees Big ETF Flows Turn](https://www.etf.com/sections/monthly-etf-flows/etf-monthly-fund-flows-february-2019)").
*Source: ETF.com; date range, 2/1- 28, 2019*
**Performance Chasing & Safe Haven**
Some of those flows are undoubtably due to performance chasing. Year-to-date, the ETF is up 12.58%, among the best of any vanilla, broad-based U.S. real estate ETF. Only the [JPMorgan BetaBuilders MSCI U.S. REIT ETF (BBRE)](https://www.etf.com/BBRE) has done better, at 12.59% (and VNQ is almost 30 times larger than BBRE).
But investors are probably also looking to VNQ as a safety play. Concerns about U.S.-Chinese trade relations and increasingly bleak global economic data have led to a slide in bond yields, particularly U.S. Treasuries. In a low-yield environment, real estate can be a haven in the storm—especially now that the Fed has pumped the brakes on rate hikes.
**Inside VNQ**
VNQ offers relatively size-agnostic exposure to the U.S. real estate market, with a broad portfolio of 191 REITs and real estate stocks (read: "[ETF Picks For A Retiree](https://www.etf.com/publications/etfr/etf-picks-retiree)").
Intriguingly, the fund's second-largest position (after an 11% allocation to the company's own real estate mutual fund) is a 6% allocation to [American Tower Corporation (AMT)](https://www.etf.com/stock/AMT).
American Tower is a cellphone tower company and infrastructure play. As such, it adds stability to the portfolio even when other real estate subsectors are declining.
**VNQ Vs Other Real Estate ETFs**
VNQ tilts toward commercial REITs (42%), distinguishing it from the $4 billion [iShares U.S. Real Estate ETF (IYR)](https://www.etf.com/IYR) (which used to be the second-largest U.S. real estate ETF until the $5 billion [Schwab U.S. REIT ETF (SCHH)](https://www.etf.com/SCHH) came along).
For its part, IYR has a smaller portfolio than VNQ (116 stocks), with a greater allocation in specialized REITS (40%).
Meanwhile, SCHH has a higher allocation to commercial REITs than VNQ (49%), with about half as many names as VNQ (99).
SCHH is also the cheapest of the big U.S. real estate ETFs, with an expense ratio of 0.07%. Though that undercuts VNQ's 0.12%, investors don't seem to mind, as VNQ remains the sector's clear heavyweight.
On average, VNQ trades $600 million in volume every day, more than four times SCHH's average trading volume. (IYR, however, remains the clear favorite for traders, with an eyepopping $710 million in daily trading volume.)
*Contact Lara Crigger at* [*lcrigger@etf.com*](mailto:lcrigger@etf.com)*.*
[ Lara Crigger ](/contributors/lara-crigger)
Lara Crigger is a veteran financial writer with more than twenty years' experience writing about ETFs, markets, and investor education. Formerly… [View Bio](/contributors/lara-crigger)
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