FREI vs VNQI

FREICFidelity Real Estate Income ETF

VNQIAVanguard Global ex-U.S. Real Estate ETF

In short

FREI Not a REIT index fund. FREI is the ETF class of Fidelity's real estate income mutual fund: an active, income-first mix of property debt and dividend-paying real estate equity, with capital growth the secondary goal.

VNQI Everything outside the US property market in one ticker: roughly 700 REITs, landlords and developers across 30-plus countries, developed and emerging, for 0.12% a year.

Stated mandate

FREI The fund seeks higher-than-average income and secondarily capital growth. It normally invests at least 80% of assets in debt and income-producing equity securities of companies principally engaged in real estate and related investments.

VNQI The Fund seeks to track the S&P Global ex-U.S. Property Index, an index of international real estate stocks in developed and emerging markets. It generally uses full replication and invests at least 80% of assets in index securities.

Why people hold it

• FREI Income first, growth second, by charter: at least 80% of assets sit in real estate debt and income-producing equity, so bonds and preferreds do work pure REIT funds skip.fidelity.com
• Two doors, one portfolio. The ETF is a share class of Fidelity's existing real estate income mutual fund, not a strategy starting from an empty book.fidelity.com
• Run by people, not a rules screen, with room to move across the capital stack from mortgage debt to REIT equity. Upper half of its global real estate peer group.fidelity.com

• VNQI At 0.12% a year, it costs about a quarter of the typical global real estate fund and lands within two basis points of the cheapest in its peer group (HAUZ, 0.10%).
• Full replication across roughly 700 names in more than 30 countries, so no single Tokyo landlord or Sydney mall owner carries the portfolio.vanguard.com
• The benchmark reaches past pure REITs into companies that own, manage and develop property, which is how it covers markets where the REIT structure barely exists.spindices.com
• Trading since 2010 and one of the tighter index trackers in its cohort, which is the whole job for a fund like this.

Worth knowing

• FREI You pay for the active mix: 0.57% net of a waiver through November 30, 2027 (0.76% gross), above the category median and above index peers like HAUZ at 0.10%.
• The ETF class is young and much smaller than the mutual fund behind it, and it trades thinly. Spreads can widen, which is what limit orders are for.
• Debt and preferreds put interest-rate moves in the mix alongside property risk, so it behaves differently from a plain equity REIT fund.

• VNQI Currency exposure is unhedged, so moves in the dollar against the yen, euro and other local currencies feed straight into results.vanguard.com
• Emerging markets and China-linked property companies are in the mix, a risk set the prospectus calls out separately from developed-market investing.vanguard.com
• Distributions land annually or semiannually rather than monthly, so the income arrives in lumps.

Full FREI profile⁠

Full VNQI profile⁠