Have you been searching for an Index fund? You might want to begin with Vanguard Real Estate Index Investor (VGSIX). VGSIX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
VGSIX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Real Estate Index Investor made its debut in May of 1996, VGSIX has garnered more than $88.44 million in assets. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2001.
Performance
Investors naturally seek funds with strong performance. VGSIX has a 5-year annualized total return of 4.62% and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.35%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VGSIX's standard deviation over the past three years is 22.16% compared to the category average of 16.71%. The standard deviation of the fund over the past 5 years is 21.31% compared to the category average of 17.12%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VGSIX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VGSIX has generated a negative alpha over the past five years of -9.73, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VGSIX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 0.98%. So, VGSIX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
This could just be the start of your research on VGSIXin the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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