---
title: "Vanguard's property fund is up 4% this year. Mortgage funds are down 15%"
url: "https://etf.net/news/vanguard-s-property-fund-is-up-4-this-year-mortgage-funds-are-down-15-2026-10-05"
published_at: "2026-10-05T14:55:48.406Z"
updated_at: "2026-10-05T14:55:48.406Z"
byline: "ETF.net Research"
---

# Vanguard's property fund is up 4% this year. Mortgage funds are down 15%

Vanguard's real estate fund, VNQ, was up 4.0% with dividends reinvested through Friday, October 2, while the iShares mortgage fund, REM, was down 15.3%.

By ETF.net Research. Published Oct 5, 2026.

The fund most people use to own US buildings is still up this year. The funds that lend against those buildings are not.

Both are called real estate, and the name does not tell you whether you own the buildings or the loans.

VNQ holds a broad set of US property companies, mostly landlords, and through Friday, October 2, it was up **4.0%** with dividends reinvested. REM holds mortgage lenders rather than buildings, and it was down **15.3%**. The fund that holds the S&P 500, SPY, was up 13.7% on that same basis.

Over its last four quarterly payments, VNQ paid 3.8% of Friday's price. REM paid 11.2%. That gap in cash is why a reader can buy one fund and think it is the other.

December's payment on the mortgage fund was $0.81 a share. March's was $0.16.

A REIT is a company that owns property and pays out most of its taxable income. A mortgage REIT holds loans, not buildings. On the same dividend-reinvested basis through Friday, the main funds split along that line.

Table: Fund, Fee, This year, Since August 31

The broad landlord funds fell together after August, by roughly 6%. The year did not treat them the same way.

USRT is 5.8 percentage points ahead of VNQ for the year, and 0.8 percentage points ahead over the five weeks. SCHH is 3.2 percentage points ahead for the year.

From the close on Monday, August 31, a holder of VNQ who reinvested dividends was down 6.4%. REM was down 16.1%, so this year's loss in the lending fund arrived in those five weeks.

On Wednesday, September 16, the Federal Reserve raised the short-term rate it sets by a quarter of a percentage point, to 3.75% to 4%. With dividends reinvested, VNQ was already down 3.1% from the August 31 close to that day's close, and it fell a further 3.4% after. REM was down 6.8% by that close, and it fell a further 10.0% after.

Chart: The mortgage fund fell **10%** after September 16

## The lending funds

REM charges 0.48% and holds $447 million. In its holdings as of Wednesday, September 30, the two largest stock positions are Annaly Capital Management, at 13.7%, and AGNC Investment, at 9.3%. From the August 31 close to Friday, Annaly was down 16.2% and AGNC was down 17.0%, dividends reinvested.

VanEck's mortgage fund, MORT, tracks an index of US mortgage REITs. It charges 0.43% and holds $316 million, and it was down 15.8% through Friday, with dividends reinvested.

As of Sunday, October 4, Annaly is 18.1% of that fund, and AGNC is 14.7%.

Nareit's indexes, also through Friday, show the same split. Equity REITs were up 7.7%. Mortgage REITs were down 14.4%.

## The same buildings

SCHH and VNQ share 114 holdings, in files as of Sunday, October 4. Welltower, the senior-housing owner, is 10.2% of each. Prologis, the warehouse landlord, is 8.1% of VNQ and 8.8% of SCHH. On a weight basis, 91% of the two portfolios sit in companies both hold.

They own largely the same buildings. For the year, SCHH is still 3.2 percentage points ahead.

SCHH tracks an index composed entirely of US equity REITs. Vanguard says the index behind VNQ includes real estate management and development companies as well as REITs. USRT tracks a different REIT index.

Welltower, Prologis and Equinix, the data-center operator, were 24.7% of VNQ and 27.4% of XLRE. Through Friday, Welltower was up 24.0% and Equinix was up 35.9%, dividends reinvested.

American Tower, the cell-tower landlord just behind them in both funds, was down 4.8%. Digital Realty, another data-center owner, was up 17.8%.

Chart: Data-center landlords **rallied**. The tower landlord did not

Nareit's sector indexes, also through Friday, show how wide that spread is. Data-center REITs were up 30.1%. Telecom REITs, the tower business, were down 11.3%. Apartment REITs were down 5.2%.

A fund that holds all three reports one number for businesses that moved apart.

RSPR gives every real estate company in the S&P 500 the same weight and resets that weight each quarter. It charges 0.40%, holds $82 million, and was up 0.7% this year, with Welltower at 3.4% against 11.6% in XLRE.

iShares says REZ tracks an index of US residential, healthcare and self-storage companies. It charges 0.48%, holds $780 million, and was up 7.3% through Friday with dividends reinvested. Welltower is 23% of it.

You can own the buildings or the loans, and both can be sold as a real estate fund. The word on the label did not say which of those you held.

Source: etf.net, https://etf.net/news/vanguard-s-property-fund-is-up-4-this-year-mortgage-funds-are-down-15-2026-10-05. Please cite the page URL.