REIT Index Fund Investor Shares (VGSIX)

Reminder: 1099-DIV Forms for Vanguard REIT Index Fund are mailed in February.

Also available in 

more share classes

, including an 

ETF

.

Indexed to MSCI US REIT Index

  Fact sheet (12/31/2013)

Summary of this fund

Vanguard REIT Index Fund 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.

Investment approach

  • Seeks to track the performance of the MSCI US REIT Index.
  • Equity real estate investment trusts.
  • Passively managed, full-replication approach.
  • Benchmark index covers two-thirds of the REIT market.
  • Low expenses minimize net tracking error.

About the benchmark

  • The MSCI US REIT Index covers approximately two-thirds of the U.S. REIT market.
  • REITs in the index must have a market capitalization of at least $100 million, with enough shares and trading volume to be considered liquid.
  • Equity REITs own and manage real estate properties, such as retail, office, residential apartment, and industrial spaces.They generate income from rental and lease payments, and offer the potential for growth from property appreciation as well as occasional capital gains from the sale of property.
  • Mortgage REITs and Hybrid REITs are not included in the index.

PRICE AND DISTRIBUTIONS

Price and distributions

as of 04/17/2014

NAV

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.

Change $/%
$23.89
– $0.10 negative change   – 0.42%
SEC yield

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.

note

REIT Index Fund Inv

The Vanguard REIT Index Fund pays 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 REITs 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 3.66% as of 03/31/2014, which is based on the full amount of REIT distributions(dividend income, as well as return of capital and capital gain).

The current adjusted effective yield is 2.54% as of 03/31/2014. 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 REIT investments for the past 2 calendar years. (These percentages are 30.29% for 2013 and 28.85% for 2012.)

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

Dividend 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.

3.96%

KEY FUND FACTS

Key fund facts

Expense ratio
0.24% as of 05/28/2013
Lipper peer average
expense ratio
1.30% as of 12/31/2013
Designation
Real Estate
Inception on
05/13/1996
Total net assets

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.

$39.2 billion as of 03/31/2014
Net assets for
VGSIX
 
$2.6 billion as of 03/31/2014
Holdings 
104 as of 03/31/2014
Management style
Index
Benchmark
MSCI US REIT Index (RMS)
Turnover rate 
 9.00%(Fiscal year-end  01/31/2014)

Fees and minimums

Fees and minimums

Purchase fee:

A fee charged by some mutual funds when an investor buys shares. This fee is not a sales charge or load because it is paid directly to the fund to offset the costs of trading certain securities.

None
Redemption fee:

A fee charged by some mutual funds when an investor sells shares. A redemption fee differs from a back-end load because the money is paid back into the fund. Many funds charge redemption fees only when shares are bought and then sold within a specific period of time, generally in an effort to discourage market-timing and short-term trading. Some brokers also charge their clients redemption fees for the sale of securities.

None
Minimum investment:
$3,000

ETF Knowledge Center™   

Objective

Vanguard REIT Index Fund 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.

Investment approach

  • Seeks to track the performance of the MSCI US REIT Index.
  • Equity real estate investment trusts.
  • Passively managed, full-replication approach.
  • Benchmark index covers two-thirds of the REIT market.
  • Low expenses minimize net tracking error.

About the benchmark

  • The MSCI US REIT Index covers approximately two-thirds of the U.S. REIT market.
  • REITs in the index must have a market capitalization of at least $100 million, with enough shares and trading volume to be considered liquid.
  • Equity REITs own and manage real estate properties, such as retail, office, residential apartment, and industrial spaces.They generate income from rental and lease payments, and offer the potential for growth from property appreciation as well as occasional capital gains from the sale of property.
  • Mortgage REITs and Hybrid REITs are not included in the index.

Total returns

as of 03/31/2014

View as:

as of 03/31/2014

View as:
30%
25
20
15
10
5
0%
 
 
 
 
 
  YTD 1 year 5 year 10 year Since inception

05/13/1996

NAV 
9.90% 4.08% 28.53% 8.28% 10.68%
Benchmark

REIT Spliced Index

*
9.98% 4.28% 28.67% 8.34%

Note: Fee adjusted for mutual funds where applicable.

* MSCI US REIT Index adjusted to include a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT 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 03/31/2014

Subindustry VGSIX Benchmark

MSCI US REIT Index

+/- Weight
Retail REIT's 25.6% 25.6% 0.0%
Residential REIT's 16.2% 16.2% 0.0%
Office REIT's 13.4% 13.4% 0.0%
Health Care REITs 13.0% 13.0% 0.0%
Diversified REIT's 10.8% 10.8% 0.0%
Specialized REIT's 8.4% 8.4% 0.0%
Hotel & Resort REITs 7.5% 7.5% 0.0%
Industrial REIT's 5.1% 5.1% 0.0%
Top sectors equal 100.0% of stock  

Sector categories are based on the Global Industry Classification Standard system.

Top 10 holdings as of 03/31/2014

 as of 03/31/2014
Rank Holding
1 Simon Property Group Inc.
2 Public Storage
3 Prologis Inc.
4 Equity Residential
5 Ventas Inc.
6 HCP Inc.
7 Boston Properties Inc.
8 Health Care REIT Inc.
9 Vornado Realty Trust
10 AvalonBay Communities Inc.
Top 10 equals 39.3% of net assets

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

Holdings policy for this fund  

Fundamentals

Stockas of 03/31/2014 VGSIX Benchmark

MSCI US REIT Index

Number of stocks 104 131
Median market cap $8.6 billion $8.6 billion
P/E ratio 57.4x 57.4x
P/B ratio 2.2x 2.2x
Turnover rate 9.0% Fiscal year end 1/2014 N/A

Risk and volatility as of 03/31/2014

as of 03/31/2014
  VGSIX Benchmark

REIT Spliced Index

R-squared N/A 1.00
Beta N/A 1.00
Alpha – 0.02 N/A
Standard deviation 16.74% 16.75%
Sharpe ratio 0.62 0.63

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. The fund’s performance could be hurt by:

  • Industry concentration risk: The chance that real estate stocks 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 because of rising interest rates. Interest rate risk should be high for the fund.
  • Investment style risk: The chance that the returns from real estate securities—which frequently are small- or mid-capitalization stocks—will trail returns from the overall stock market. Historically, real estate securities have performed quite differently from the overall market.



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