If you're looking for an Index fund category, then a possible option is Vanguard REIT 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
Vanguard Group is based in Malvern, PA, and is the manager of VGSIX. Vanguard REIT Index Investor debuted in May of 1996. Since then, VGSIX has accumulated assets of about $246.23 million, according to the most recently available information. The fund's current manager, Gerard C. O'Reilly, has been in charge of the fund since May of 1996.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.73%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.86%, which places it in the top third during this time-frame.
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. Over the past three years, VGSIX's standard deviation comes in at 12.84%, compared to the category average of 8.85%. The fund's standard deviation over the past 5 years is 14.3% compared to the category average of 9.2%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In VGSIX's case, the fund lost 64.54% in the most recent bear market and underperformed its peer group by 21%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.58, so it is likely going to be less volatile than the market at large. 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's 5-year performance has produced a positive alpha of 3.62, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 0.25% compared to the category average of 0.86%. Looking at the fund from a cost perspective, VGSIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Don't stop here for your research on Index funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VGSIX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (VGSIX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research