Vanguard Real Estate Index Admiral This fund seeks to mirror the MSCI US Investable Market Real Estate 25/50 Index, an equity real estate investment trust index focused on income-producing properties owned by equity real estate investment trusts. Real Estate Investment Trust also owns some real estate management firms, though these comprise less than 5% of its portfolio. This fund offers a cost-efficient portfolio that tracks the U.S. real estate market accurately, spread among multiple holdings, and utilizes cost-efficient market cap weighting to capture collective wisdom regarding valuation and prospects of each company. Due to its performance, Morningstar awarded this fund their Medalist Rating of Gold across Admiral, Institutional, Exchange Traded Share Class as well as upgrading from Silver for their Investor Share Class share class.

Since adopting its current benchmark in February 2018 the fund has seen impressive results, outperforming its Morningstar Category average by 68 basis points annually. While contributions from specialized REITs may have helped, its true strength lies in its low costs – the bottom decile among peers in terms of costs; low turnover results in no transaction fees being accrued as well.

Investors should carefully consider a fund’s beta and historical volatility measures, which help gauge its risk relative to the market. With a 5-year beta of 0.96 – suggesting it tends to be less volatile than overall markets – investors may wish to be mindful that 36% of its assets consist of cheap office REITs as well as some potential risks such as data centers or shopping malls that may prove troublesome to some investors.