Vanguard's REIT ETF, VNQ, is our loser of the week, down 1%. Despite this week's setback, REITs have had a good run. VNQ has a total return of 29% for the latest 12 months and just over 7.3% since its inception in September 2004. The meager dividend of late has been supplemented by a rising price.
VNQ is a passive ETF tracking the MSCI US REIT Index. Mirroring the index, VNQ has a wide range of holdings that include REITs of all types: residential, diversified, office, retail, industrial. The largest holdings are the Simon Property Group, Public Storage, Vornado Realty Trust, HCP Inc, and Equity Residential.
VNQ compares favorably with other choices such as RWR, IYR, and PSR, an actively managed REIT ETF. A minuscule expense ratio of .13% will certainly help long term performance. Vanguard's "objective" for VNQ is a high level of income and moderate long term capital appreciation. I'd say So Far So Good.
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