Real Estate ETF (VNQ)

Reminder: 1099-DIV Forms for Vanguard Real Estate Index Funds are mailed in February.

Also available as a 

mutual fund.

Indexed to MSCI US IM Real Est 25/50 Tran Idx

  Fact sheet (12/31/2017)

Summary of this fund

Vanguard Real Estate ETF seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments.

Investment approach

  • Seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Transition Index.
  • Equity real estate investment trusts.
  • Passively managed, full-replication approach.
  • Low expenses minimize net tracking error.

About the benchmark

  • An interim index that will gradually increase exposure to the MSCI US Investable Market Real Estate 25/50 Index while reducing exposure to the MSCI US REIT Index.
  • The MSCI US Investable Market Real Estate 25/50 Index includes stocks of U.S. companies within the Real Estate sector.
  • The sector includes real estate management and development companies in addition to real estate investment trusts (REITs).
  • Uses GICS methodology and clearly classified sectors.
  • Offers broad representation of the target sector across large-, medium-, and small-cap companies.

PRICE AND DISTRIBUTIONS

Price and distributions

as of 02/16/2018

The price at which a security trades in the secondary market. The market price is determined by the midpoint between the bid and asked prices as of the closing time of the New York Stock Exchange (typically 4 p.m., Eastern time) on business days.

Change $/%
$75.35
$0.50 positive change   0.67%

For funds with a fluctuating price per share, the net asset value (NAV) is the market value of a mutual fund's total assets, minus liabilities, divided by the number of shares outstanding. The value of a single share is called its share value or share price.

For money market funds that seek to maintain a stable price per share, the NAV is calculated by valuing securities at amortized cost, which approximates market value.

Change $/%
$75.35
$0.45 positive change   0.60%

A non-money market fund's SEC yield is based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.



The SEC yield for a money market fund is calculated by annualizing its daily income distributions for the previous seven days.

Real Estate ETF

The Vanguard Real Estate Index Funds pay quarterly distributions consisting of dividend income, return of capital, and capital gains. However, the tax characteristics of these distributions cannot be determined until after the end of the year since the issuers in which the fund invests do not designate the composition (i.e., dividend income, return of capital, and capital gains) of their payments until the new calendar year.

Since Vanguard cannot know the taxability of the portfolio's distributions during the year, unadjusted and adjusted effective yields are calculated.

The current unadjusted effective yield is 3.83% as of 01/31/2018, which is based on the full amount of issuers' distributions (dividend income, as well as return of capital and capital gain).

The current adjusted effective yield is 2.40% as of 01/31/2018. The adjusted yield reflects a reduction in the income included in the yield based on the average return of capital and capital gain distributions received from the fund's issuers' investments for the past 2 calendar years. (These percentages are 40.94% for 2016 and 29.91% for 2015.)

Please remember that the yield is calculated monthly like other stock funds and that Vanguard is not quoting a 30-day SEC yield.

The annual rate of return on a share of stock, determined by dividing the annual dividend by its current share price. In a stock mutual fund, this figure represents the average dividend yield of the stocks held by the fund.

4.20%

KEY FUND FACTS

Key fund facts

Expense ratio
0.12% as of 05/25/2017
Lipper peer average
expense ratio
1.283% as of 12/31/2016
Designation
Real Estate
Inception on
09/23/2004
Earliest share class
inception on
05/13/1996

This represents the total net assets for all share classes of Vanguard's U.S. funds that share the same investment strategy, management and holdings, but does not include any collective trusts sharing the same investment mandate.

$60.5 billion as of 01/31/2018
Net assets for
VNQ
 
$32.4 billion as of 01/31/2018
Holdings 
183 as of 01/31/2018
Management style
Index
Benchmark
MSCI US IM Real Est 25/50 Tran Idx
Turnover rate 
 6.70%(Fiscal year-end  01/31/2018)
CUSIP
922908553

TRADING

Trading

Intraday Optimized Value Ticker
Intraday Optimized Value (IOV), also known as the Intraday Indicative Value (IIV), is the calculated per share price of the ETF which is published every 15 seconds based on the last sale price of each of the underlying securities in the portfolio basket, plus any estimated cash amounts associated with the creation unit.

VNQ.IV
Outstanding shares:
409,026,508 as of 01/31/2018
ETF exchange:
NYSE Arca

Objective

Vanguard Real Estate ETF seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments.

Investment approach

  • Seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Transition Index.
  • Equity real estate investment trusts.
  • Passively managed, full-replication approach.
  • Low expenses minimize net tracking error.

About the benchmark

  • An interim index that will gradually increase exposure to the MSCI US Investable Market Real Estate 25/50 Index while reducing exposure to the MSCI US REIT Index.
  • The MSCI US Investable Market Real Estate 25/50 Index includes stocks of U.S. companies within the Real Estate sector.
  • The sector includes real estate management and development companies in addition to real estate investment trusts (REITs).
  • Uses GICS methodology and clearly classified sectors.
  • Offers broad representation of the target sector across large-, medium-, and small-cap companies.

Total returns

as of 12/31/2017

View as:

as of 12/31/2017

View as:
10%
9
8
7
6
5
4
3
2
1
0%
 
 
 
 
 
  YTD 1 year 5 year 10 year Since

09/23/2004

Market price  4.90% 4.90% 9.24% 7.65% 8.89%
NAV 
4.95% 4.95% 9.24% 7.64% 8.89%

Real Estate Spliced Index

*
5.07% 5.07% 9.34% 7.63%

* MSCI US REIT Index adjusted to include a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT Index through January 31, 2018; MSCI US Investable Market Real Estate 25/50 Transition Index thereafter.

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited.


Top subsectors as of 01/31/2018

Subindustry VNQ

MSCI US Investable Market Real Estate 25/50 Transition Index

+/- Weight

Data is currently unavailable
Please try again later.

Sector categories are based on the Global Industry Classification Standard, except for the "Other" category (if applicable), which includes securities that have not been provided a Global Industry Classification Standard as of the effective reporting period.

Top 10 holdings as of 01/31/2018

 as of 01/31/2018
Rank Holding
1 Vanguard REIT II Index Fund
2 Simon Property Group Inc.
3 Equinix Inc.
4 Prologis Inc.
5 Public Storage
6 AvalonBay Communities Inc.
7 Digital Realty Trust Inc.
8 Equity Residential
9 Welltower Inc.
10 Ventas Inc.
Top 10 equals 38.8% of net assets

Portfolio holdings may exclude any temporary cash investments and equity index products.

Holdings policy for this fund  

Fundamentals

Equityas of 01/31/2018 VNQ

MSCI US Investable Market Real Estate 25/50 Transition Index

Number of equity 183
Median market cap $9.8 billion
P/E ratio 32.4x
P/B ratio 2.1x
Turnover rate 6.7% Fiscal year end 1/2018 N/A

Risk and volatility as of 01/31/2018

as of 01/31/2018
  VNQ

Real Estate Spliced Index

R-squared N/A 1.00
Beta N/A 1.00
Alpha – 0.02 N/A
Standard deviation 13.19% 13.19%
Sharpe ratio 0.07 0.09

Risk and volatility are based on the share class with the earliest inception date.

Risk measures are calculated from trailing 36-month fund returns relative to the associated benchmarks.

An investment in the fund could lose money over short or even long periods. You should expect the fund’s share price and total return to fluctuate within a wide range, like the fluctuations of the overall stock market. Although REIT ETF is listed for trading on the NYSE Arca, it is possible that an active trading market may not be maintained. Trading of REIT ETF on the NYSE Arca may be halted if NYSE Arca officials deem such action appropriate, if REIT ETF is delisted from the NYSE Arca, or if the activation of marketwide “circuit breakers” halts stock trading generally. The fund’s performance could be hurt by:

  • Industry concentration risk: The chance that the stocks of REITs and other real estate-related investments will decline because of adverse developments affecting the real estate industry and real property values. Because the fund concentrates its assets in real estate stocks, industry concentration risk is high.
  • Stock market risk: The chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising stock prices and periods of falling stock prices. The fund’s target index may, at times, become focused in stocks of a particular sector, category, or group of companies. Because the fund seeks to track its target index, the fund may underperform the overall stock market.
  • Interest rate risk: The chance that REIT stock prices overall will decline, and that the cost of borrowing for REITs will increase because of rising interest rates. Interest rate risk is high for the portfolio.
  • Investment style risk: The chance that the returns from REIT stocks—which frequently are small- or mid-capitalization stocks—will trail returns from the overall stock market. Historically, REIT stocks have performed quite differently from the overall market.
  • Nondiversification risk: The chance that the fund may invest a greater percentage of its assets in a particular issuer or group of issuers or may own larger positions of an issuer’s voting stock than a diversified fund.




Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.