VNQ Dividend: What Vanguard's Real Estate ETF Pays, Holds and Costs Next to Non-Traded REITs (Filings, October 2026)

What we read

For VNQ we read Vanguard's own filings, not a quote page: the Form N-CSR for the fiscal year ended January 31, 2026 (filed March 27, 2026), the Form N-CSRS for the six months ended July 31, 2026 (filed October 1, 2026), the Form N-PORT for July 31, 2026 and the ETF Shares summary prospectus (Form 497K, May 28, 2026). Vanguard's Real Estate Index Fund has a January 31 fiscal year, so "last year's distributions" in its reports means February 2025 to January 2026, not calendar 2025.

For the non-traded side we used the two NAV REITs our other pages follow most closely: Blackstone Real Estate Income Trust (BREIT) and JLL Income Property Trust, from their Forms 10-K (2025) and 10-Q (June 30, 2026). We left out the others on purpose and link to them: best non-traded NAV REITs, Blue Owl, J.P. Morgan, Morgan Stanley and Apollo compared and the redemption status tracker.

Two things we could not save from a primary source, and how we handled them:

1. The quarterly dates and amounts. Vanguard's fund page loads its distribution table with scripts and returned no table to us on October 17, 2026. We saved a third-party compilation (Dividend Vision) and checked it against the filings: the four payments from March to December 2025 add up to $3.4718, which matches the $3.472 in the N-CSRS, and the March and June 2026 payments add up to $1.8011 against $1.801 for the six months. Dates and the December 2026 schedule come from that site, which says it cites the issuer's schedule.
2. The Form 1099-DIV split. Vanguard publishes per-share qualified-dividend and section 199A percentages in a tax-information document. The address we tried for the 2025 version returned an error page, so we do not give those percentages.

VNQ: cost and what the fund is

The ETF Shares summary prospectus says the fund “seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments.” The index is the MSCI US Investable Market Real Estate 25/50 Index.

The holdings themselves, and how VNQ compares line by line with SCHH, XLRE and IYR, are in our REIT ETF holdings page, so we do not repeat that table. In the N-CSRS composition table the biggest sectors are health care REITs (15.0%), retail (12.6%), industrial (10.0%) and data centers (8.6%), with 14.5% inside Real Estate II and 5.0% in real estate services companies. The liquid funds that come up when you search “VNQ” (SCHH, XLRE and the rest) overlap VNQ heavily; the question on this page is VNQ against a non-traded REIT.

What VNQ distributes, and when

VNQ pays quarterly. These are the last 24 payments in the third-party list we saved (the ex-dividend date is the date shown there). We checked the total of each fiscal year against the N-CSRS where the filing has it.

Each row is one fiscal year of the fund (February to the following January), with the payments by the month of the ex-dividend date. The sums match the Financial Highlights to rounding, which is why we trust the list for the amounts even though it is not a Vanguard document. In the fiscal year ended January 31, 2026 the four payments add up to $3.4718 (our arithmetic), matching the $3.472 in the Financial Highlights.

The Q4 hook. The December payment was the largest of its fiscal year in the three years to January 2024 ($1.0531, $1.1635 and $1.0683), then $0.8555 in December 2024 (below the June payment of $1.0328) and $0.8005 in December 2025 (the smallest of that fiscal year). The December 2026 ex-date shown on the third-party calendar is December 21, 2026, with payment on December 23, 2026; that calendar also lists a second scheduled ex-date of December 30, 2026 (pay date January 4, 2027), and shows no amount for either. We have not saved Vanguard's own schedule, so treat the dates as the third party's reading of the issuer's calendar; the second date falls in 2027 for tax purposes if it is paid on January 4.

At the July 31, 2026 NAV of $98.87, the last four payments ($0.8005 + $0.9457 + $0.8554 + $0.8046 = $3.4062) are 3.45% (our arithmetic). That is a distribution divided by NAV, not by the price you would pay on the day, and it is not a forecast.

Return of capital inside a REIT ETF

A REIT pays out more cash than it reports as taxable income, because depreciation shelters part of the income. The excess is usually reported as return of capital. The REIT's holder, here the fund, passes it on. The N-CSR says how the fund treats it: “Each investment security reports annually the tax character of its distributions.” The fund then reports its own split for each year.

The ETF Shares table in Financial Highlights gives five fiscal years of per-share figures:

For the same two latest years the fund-level tax table (all share classes) is:

What this means in plain terms, from the filings:

• About a quarter of what VNQ paid was not income for tax purposes. On $100,000 at the 3.45% distribution rate above, that is $3,450 a year in distributions, of which about $845 would be return of capital if the split matched the latest year (our arithmetic; the split changes each year and the calendar-year 1099 can differ from the fund's fiscal year).
• Return of capital is not free money and is not tax-free forever. JLL Income Property Trust's Form 10-K states the mechanism for a REIT's own holders: a return-of-capital distribution “will reduce the stockholder’s adjusted basis.” It lowers your cost basis, which raises the gain when you sell. The same arithmetic applies to a REIT ETF holder.
• The rest is ordinary income, not qualified dividends. BREIT's Form 10-K says: “Generally, ordinary dividends payable by REITs do not qualify for reduced U.S. federal income tax rates.” The same filing notes that individuals may be able to deduct 20% of ordinary REIT dividends (the section 199A deduction). Whether the fund's pass-through of its own REIT holdings qualifies line by line is on the Form 1099-DIV and was not in the documents we could save.
• No long-term capital gains were distributed in either year shown in the fund's tax table, against portfolio turnover of 7% for the year to January 31, 2026 and 4% for the six months to July 31, 2026.

The non-traded side, from the same kinds of filings

Three readings, each from the table:

1. The fee gap is large and documented. BREIT's 1.25% management fee is 9.6 times VNQ's whole 0.13% (our arithmetic), and BREIT then charges a performance participation on top. On $10,000 that is $125 a year against $13, before the performance participation. The 1.25% applies to the standard share classes; the filing lists different rates for others, such as 1.0% for Class L.

2. A distribution that is “100% from operating cash flow” can still be mostly return of capital for tax. BREIT's Sources of Distributions table says 100% of the first-half 2026 distributions came from cash flow from operating activities. Its tax table says 100.00% of 2025-tax-year distributions were return of capital. Both statements are in the same company's filings, and they are not in conflict: one measures where the cash came from, the other what the IRS sees as income. GAAP operating cash flow adds back depreciation and taxable income generally does not, so the two can diverge. VNQ's fund-level split shows the same effect, smaller.

3. “Coverage” depends on which yardstick the filing offers. BREIT's operating cash flow covered 102.1% of its first-half distributions, its AFFO 61.2% and its FAD 56.9% (our arithmetic on $1,188,572 thousand, $1,213,888 thousand, $727,940 thousand and $676,687 thousand), and 51% of the distributions were reinvested in shares rather than paid in cash. For a public REIT ETF there is no equivalent table, because the fund distributes what its REITs pay it, after its own costs. For the Q2 2026 liquidity record of BREIT and its peers, see our BREIT review and the JLL Income Property Trust review.

What a reader can do with this

• Put the same four numbers beside each other before you compare yields. Fee (0.13% against 1.25% plus a performance share), tax character (24.5% against 100% return of capital in the latest years shown), how the distribution is funded, and how fast you can sell. A higher stated rate on a non-traded REIT is not the same product as a lower rate on an ETF.
• Check your own Form 1099-DIV for the box detail. Box 1a (ordinary), box 1b (qualified), box 3 (return of capital) and box 5 (section 199A) are what count for your return. We did not have Vanguard's 2025 per-share tax percentages as a saved document, so use the form, not our estimate.
• Mind the fiscal year when you read Vanguard's reports. The N-CSR's “year ended January 31, 2026” includes eleven months of calendar 2025 and one of 2026.
• If you hold a non-traded REIT and are comparing it with a listed ETF, look at the sale price you would get, not only the rate. A listed fund has a market price that can sit above or below NAV on any day; a NAV REIT redeems at NAV, up to its caps. Our non-traded REIT vs publicly traded REIT page covers that gap, and Fundrise vs REITs does the comparison for a crowdfunding fund.

This is analysis of public documents, not investment, legal or tax advice. We do not recommend any fund.

FAQ

Sources: SEC EDGAR, retrieved October 17, 2026. Vanguard Real Estate Index Fund (CIK 734383): Form N-CSR for the year ended January 31, 2026, accession 0001104659-26-036013 (filed March 27, 2026); Form N-CSRS for the six months ended July 31, 2026, accession 0001104659-26-112650 (filed October 1, 2026); Form N-PORT for July 31, 2026, accession 0000734383-26-000299; Vanguard Real Estate ETF summary prospectus (Form 497K), accession 0000734383-26-000136 (May 28, 2026). Blackstone Real Estate Income Trust (CIK 1662972): Form 10-K for 2025, accession 0001662972-26-000032; Form 10-Q for June 30, 2026, accession 0001662972-26-000111. JLL Income Property Trust (CIK 1314152): Form 10-K for 2025, accession 0001314152-26-000030; Form 10-Q for June 30, 2026, accession 0001314152-26-000149. Quarterly VNQ payment dates and amounts and the December 2026 schedule: third-party pages dividendvision.com/dividends/vnq-dividend-history and /vnq-dividend-calendar, saved October 17, 2026; they are not Vanguard documents. Percentages, per-share sums, yields on NAV and multiples are our arithmetic on those documents. This is analysis of public documents, not investment, legal or tax advice.