Vanguard Real Estate Index Adm (VGSLX) provides an affordable way of tracking the performance of real estate investment trusts (REITs). The fund invests primarily in stocks included in the MSCI US Investable Market Real Estate 25/50 Index which features REITs that own and operate income-producing properties; additionally it may hold some REIT management companies which could boost returns when markets favor those firms; its low cash allocation helps it weather turbulent markets while its straightforward strategy may fail to capture significant outperformance from REITs over their peers; its low cash allocation helps it hold steady under tough market volatility while potentially missing out on strong outperformance opportunities if REITs don’t outpace their peers compared with what would otherwise have been seen.

Since adopting its current benchmark in February 2018, this fund has established an impressive track record, outperforming the Morningstar Real Estate category average by 68 basis points annually up until December 2023. Solid contributions from REITs as well as its ultra-low costs are primary drivers behind its outstanding outperformance; making this fund an attractive option for investors looking to diversify their holdings within this sector.

As opposed to many actively managed REIT funds, this one uses market cap weightings as a cost-efficient method for selecting securities that make the index cut, thus tapping into market wisdom about each company’s relative worth and helping mitigate frequent trading activities which incur transaction expenses and cause increased turnover costs for investors. Furthermore, its top-quality management team helps keep turnover under control.

Vanguard provides different share classes for its mutual funds, such as Admiral and Investor shares. Each has a separate minimum initial investment requirement and expense ratio.