Vanguard Real Estate Index Admiral Shares (VGSLX) track the MSCI US Investable Market Real Estate 25/50 Index. This index comprises mostly equity real estate investment trusts – companies that own and operate income-producing property. A small slice of real estate management companies may be included but typically represent less than 5% of assets. VGSLX’s diverse portfolio and low costs make it an ideal way to gain exposure to U.S. real estate market.

VGSLX has consistently outperformed the market average since adopting its current benchmark of an 80% weighting of public real estate stocks. Its broad-based strategy and restriction on concentration protect it from sector hiccups; with multiple holdings spread among market cap weighting it also reduces turnover costs associated with active funds.

The fund’s minimal expenses allow it to pass more of its gains onto shareholders and its diversified exposure should help minimize volatility; however, its lack of liquidity may exacerbate some price swings.

Real estate investments should be seen as relatively illiquid assets. It may be challenging for investors to quickly sell or liquidate an investment when prices decline quickly, leading to potential loss of principal. Vanguard Group operates several mutual and exchange-traded funds managed by this fund as well as asset management services for clients worldwide; their chief investment officer Gregory Davis CFA leads both Equity Index and Investment Strategy groups within this fund.