Mutual Fund: CGM Realty
ETF Replacement: Vanguard REIT Index
By looking at the 8% total return of the CGM Realty (MUTF:CGMRX) fund — which leverages high-yielding REITs — you would think the real estate market had a tough time in 2012.
However, the Vanguard REIT Index ETF (NYSE:VNQ) — which tracks the MSCI US REIT Index, spanning small-to-large-cap REITs — did much better, with a gain of 15.4%.
Part of it was fund manager Ken Heebner’s choice of stocks, but also adding to that disparity was 0.88% in expenses for CGMRX vs. just 0.1% for VNQ. That said, you at least didn’t have to pay even more up front for that underperformance — CGMRX mercifully does not charge a load fee.