Vanguard is one of the world’s best-known mutual fund providers, overseeing over $8 trillion. Their low-cost index funds have become staples in investors’ portfolios for decades – but Vanguard also offers active management funds and ETFs as options.

Vanguard Real Estate Index Admiral Shares (VGSLX) is a mutual fund that tracks the MSCI US Investable Market Real Estate 25/50 Index and boasts low costs and broad exposure, making it an excellent option for long-term investors seeking exposure to real estate as part of an overall economy portfolio.

VGSLX boasts an expense ratio of just 0.13%, making its expense ratio 89% lower than the average fund in its category. This low fee is integral to long-term performance as higher fees reduce returns significantly. Distributions consist of dividend income, capital gains and returns of investment; taxability will depend upon how much capital gains have been realized so consult a tax professional prior to investing.

Since adopting its current benchmark in 2018, VGSLX has outshone its peers by an average annual margin of about 68 basis points, placing the fund near the top of its category. While REIT contributions have contributed, its true strength lies in its low expenses; all share classes rank in the lowest decile when it comes to expenses while its low turnover has resulted in few transaction costs.

The fund’s diverse portfolio comprises more than 200 stocks from across multiple industry sectors and companies, and includes small- and mid-cap stocks as well. This diversity helps mitigate interest rate risk as higher rates tend to harm REIT stock prices.

Other risks to keep in mind when investing in REIT stocks is that their value could decline and that the fund may underperform the market overall. Furthermore, nondiversification risk exists which risks that too much exposure to one issuer or group of issuers exists as opposed to having an evenly spread portfolio of companies like in a diversified fund.

With its Morningstar Medalist Rating of Gold for Admiral and Exchange-Traded Shares, this fund is an excellent option for investors who seek broad exposure to U.S. real estate at relatively low costs. Thanks to its refined indexing process, low management fees, and efficient trading capabilities, this fund closely tracks its target portfolio benchmarks net of expenses. This fund is managed by Vanguard Group’s Malvern office with Gregory Davis acting as chief investment officer of Equity Index Group’s Equity Index Strategy Quantitative Equity, Fixed Income Index groups responsible for overseeing this fund since 1996 – long may he stay put!