See the inside front cover for important information about access to your |
Sales Charge (Load) Imposed on Purchases | None |
Purchase Fee | None |
Sales Charge (Load) Imposed on Reinvested Dividends | None |
Redemption Fee | None |
Management Fees | 0.09% |
12b-1 Distribution Fee | None |
Other Expenses | 0.01% |
Total Annual Fund Operating Expenses | 0.10% |
1 Year | 3 Years | 5 Years | 10 Years |
$10 | $32 | $56 | $128 |
Total Return | Quarter | |
Highest | 17.28% | March 31, 2019 |
Lowest | -14.49% | September 30, 2011 |
1 Year | 5 Years | 10 Years | |
Vanguard Real Estate Index Fund Institutional Shares | |||
Return Before Taxes | 29.02% | 7.20% | 12.01% |
Return After Taxes on Distributions | 27.64 | 5.86 | 10.71 |
Return After Taxes on Distributions and Sale of Fund Shares | 17.15 | 4.97 | 9.26 |
Comparative
Indexes (reflect no deduction for fees, expenses, or taxes) |
|||
MSCI US REIT Index | 25.84% | 7.03% | 11.93% |
Real Estate Spliced Index | 29.03 | 7.27 | 12.06 |
MSCI US Investable Market Real Estate 25/50 Index | 29.03 | — | — |
Plain Talk About Fund Expenses |
All mutual funds have operating expenses. These expenses, which are deducted from a fund’s gross income, are expressed as a percentage of the net assets of the fund. Assuming that operating expenses remain as stated in the Fees and Expenses section, Vanguard Real Estate Index Fund Institutional Shares’ expense ratio would be 0.10%, or $1.00 per $1,000 of average net assets. The average expense ratio for real estate funds in 2019 was 1.19%, or $11.90 per $1,000 of average net assets (derived from data provided by Lipper, a Thomson Reuters Company, which reports on the mutual fund industry). |
Plain Talk About Costs of Investing |
Costs are an important consideration in choosing a mutual fund. That is because you, as a shareholder, pay a proportionate share of the costs of operating a fund and any transaction costs incurred when the fund buys or sells securities. These costs can erode a substantial portion of the gross income or the capital appreciation a fund achieves. Even seemingly small differences in expenses can, over time, have a dramatic effect on a fund’s performance. |
Plain Talk About REITs |
Rather than directly owning properties—which can be costly and difficult to convert into cash when needed—some investors buy shares in a company that owns and manages real estate. Such a company is known as a real estate investment trust, or REIT. Unlike corporations, REITs do not have to pay income taxes if they meet certain Internal Revenue Code requirements. To qualify, a REIT must distribute at least 90% of its taxable income to its shareholders and receive at least 75% of that income from rents, mortgages, and sales of property. REITs offer investors greater liquidity and diversification than direct ownership of a handful of properties. REITs also offer the potential for higher income than an investment in common stocks would provide. As with any investment in real estate, however, a REIT’s performance depends on several factors, such as the company’s ability to find tenants for its properties, to renew leases, and to finance property purchases and renovations. That said, returns from REITs may not correspond to returns from direct property ownership. |
Plain Talk About Types of REITs |
An equity REIT generally owns properties directly. Equity REITs typically generate income from rental and lease payments, and they offer the potential for growth from property appreciation as well as occasional capital gains from the sale of property. A mortgage REIT makes loans to commercial real estate developers. Mortgage REITs earn interest income and are subject to credit risk (i.e., the chance that a developer will fail to repay a loan). A hybrid REIT holds both properties and mortgages. The Fund invests in equity REITs and other real estate-related investments. |
Fund
Allocation by REIT Type |
Percentage of Fund |
Specialized | 33.5% |
Residential | 15.0 |
Retail | 11.3 |
Health Care | 9.8 |
Office | 9.5 |
Industrial | 8.6 |
Diversified | 4.9 |
Hotel & Resort | 3.7 |
Real Estate Services | 2.9 |
Real Estate Development | 0.4 |
Real Estate Operating Companies | 0.2 |
Diversified Real Estate Activities | 0.2 |
Plain Talk About Derivatives |
Derivatives can take many forms. Some forms of derivatives—such as exchange-traded futures and options on securities, commodities, or indexes—have been trading on regulated exchanges for decades. These types of derivatives are standardized contracts that can easily be bought and sold and whose market values are determined and published daily. On the other hand, non-exchange-traded derivatives—such as certain swap agreements—tend to be more specialized or complex and may be more difficult to accurately value. |
Plain Talk About Vanguard’s Unique Corporate Structure |
The Vanguard Group is owned jointly by the funds it oversees and thus indirectly by the shareholders in those funds. Most other mutual funds are operated by management companies that are owned by third parties—either public or private stockholders—and not by the funds they serve. |
Plain Talk About Distributions |
As a shareholder, you are entitled to your portion of a fund’s income from interest and dividends as well as capital gains from the fund’s sale of investments. Income consists of both the dividends that the fund earns from any stock holdings and the interest it receives from any money market and bond investments. Capital gains are realized whenever the fund sells securities for higher prices than it paid for them. |
Plain Talk About Return of Capital |
The Internal Revenue Code requires a REIT to distribute at least 90% of its taxable income to investors. In many cases, however, because of “noncash” expenses such as property depreciation, an equity REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to investors. Such a distribution is classified as a return of capital. |
Plain Talk About Buying a Dividend |
Unless you are a tax-exempt investor or investing through a tax-advantaged account (such as an IRA or an employer-sponsored retirement or savings plan), you should consider avoiding a purchase of fund shares shortly before the fund makes a distribution, because doing so can cost you money in taxes. This is known as “buying a dividend.” For example: On December 15, you invest $5,000, buying 250 shares for $20 each. If the fund pays a distribution of $1 per share on December 16, its share price will drop to $19 (not counting market change). You still have only $5,000 (250 shares x $19 = $4,750 in share value, plus 250 shares x $1 = $250 in distributions), but you owe tax on the $250 distribution you received—even if you reinvest it in more shares. To avoid buying a dividend, check a fund’s distribution schedule before you invest. |
Year Ended January 31, | |||||
For a Share Outstanding Throughout Each Period | 2020 | 2019 | 2018 | 2017 | 2016 |
Net Asset Value, Beginning of Period | $18.28 | $17.43 | $18.08 | $16.90 | $18.97 |
Investment Operations | |||||
Net Investment Income | 0.5181 | 0.5431 | 0.5681 | 0.515 | 0.489 |
Net Realized and Unrealized Gain (Loss) on Investments | 2.496 | 1.085 | (0.444) | 1.540 | (1.870) |
Total from Investment Operations | 3.014 | 1.628 | 0.124 | 2.055 | (1.381) |
Distributions | |||||
Dividends from Net Investment Income | (0.522) | (0.583) | (0.542) | (0.519) | (0.479) |
Distributions from Realized Capital Gains | — | — | (0.007) | (0.123) | — |
Return of Capital | (0.172) | (0.195) | (0.225) | (0.233) | (0.210) |
Total Distributions | (0.694) | (0.778) | (0.774) | (0.875) | (0.689) |
Net Asset Value, End of Period | $20.60 | $18.28 | $17.43 | $18.08 | $16.90 |
Total Return | 16.77% | 9.70% | 0.60% | 12.23% | –7.27% |
Ratios/Supplemental Data | |||||
Net Assets, End of Period (Millions) | $10,027 | $8,206 | $8,176 | $7,799 | $6,785 |
Ratio of Total Expenses to Average Net Assets | 0.10% | 0.09% | 0.10% | 0.10% | 0.10% |
Ratio of Net Investment Income to Average Net Assets | 2.63% | 3.18% | 3.03% | 2.76% | 2.82% |
Portfolio Turnover Rate2 | 6% | 24% | 6% | 7% | 11% |
1 | Calculated based on average shares outstanding. |
2 |
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares, including ETF Creation Units. |
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Inception Date |
Newspaper Abbreviation |
Vanguard Fund Number |
CUSIP Number | |
Real Estate Index Fund | ||||
Institutional Shares | 12/2/2003 (Investor Shares 5/13/1996) |
RealEIxIns | 3123 | 921908869 |