Vanguard Real Estate Index Admiral Shares invest in the MSCI US Investable Market Real Estate 25/50 Index. Their broad portfolio accurately tracks U.S. real estate markets while diversifying bets among multiple holdings to avoid concentration risk associated with many actively managed peers. Furthermore, their low costs enable it to deliver category average returns at fractions of active management’s costs; further earning them Morningstar Medalist Ratings in admiral, institutional, exchange traded share classes as well as Gold Ratings from Morningstar for investor shares classes respectively – earning them Morningstar Medalist Ratings each time!

Since switching to its current benchmark in February 2018, this fund has delivered strong category performance relative to its category peers and performed admirably against the S&P 500. Contributions from specialized REITs played an important role; however, its rock-bottom costs stand out. Admiral and investor shares in this fund rank in the bottom decile among U.S. real estate category funds; in turn this translates into few trading fees and reduced risk exposure.

VGSLX’s 5-year beta of 0.92 indicates it tends to be less volatile than the market as a whole. Alpha, another important metric to take into account, measures performance on a risk-adjusted basis relative to its benchmark; over the past five years this fund’s negative alpha reflects managers’ difficulties generating above-benchmark returns.

This fund’s broad reach and index-like restrictions help ease concentration concerns while remaining too conservative in some markets. The fund’s top 10 holdings typically account for between 36%-50% of its portfolio; however, their diversification helps mitigate this shortcoming. Furthermore, holdings such as REITs which lean more towards value-growth style tend to land it nearer the center of Morningstar Style Box while its unadjusted effective yield of 3.2% falls far short of averages among its peers.