Vanguard REIT Index ETF (VNQ)
When it comes to low cost, there is no denying that the Vanguard’s wizards in Malvern are the leaders. And the commercial real estate sector is no exception. The Vanguard REIT Index ETF (VNQ) charges just 0.10% — or $10 per $10,000 invested — in expenses.
But the VNQ is also a heck of a fund.
The REIT ETF tracks 126 of America’s largest REITs across various property sub-types. Top holdings include apartment operator Avalonbay Communities (AVB) and hospital/medical property owner Ventas (VTR). However, the fund focuses strictly on “equity” REITs — meaning actual property owners. There are no mortgage REIT holdings in the fund. That provides investors with pure exposure to physical commercial real estate.
Investors seem to like that fact, as VNQ is one of the most heavily traded ETFs on the planet and has more than $18 billion in assets. Returns have been pretty swift as well: VNQ has managed to produce a 8.3% annual return since it first started trading in 1996.
Not to mention it kicks off a 3.77% dividend yield.