SAN DIEGO (ETFguide.com) - Vanguard has just introduced a new
exchange-traded fund (ETF) called the Vanguard Global ex-U.S. Real
Estate Index Fund (NasdaqGM: VNQI).
is linked to the S&P Global ex-U.S. Property Index and it will
invest in real estate investment trusts (REITs) and real estate
operating companies (REOCs) in emerging markets along with
developed markets outside the United States. The new global
property ETF will complement the Vanguard REIT Index Fund
(NYSEArca: VNQ), which holds domestic real estate securities.
Vanguard offers the following four share classes of the Global
ex-U.S. Real Estate Index Fund: Investor Shares (with an estimated
expense ratio of 0.50%); Institutional Shares (0.30%); Signal
Shares (0.35%); and ETF Shares, ticker symbol VNQI (0.35%). Also,
the Valley Forge, PA-based mutual fund giant assess purchase and
redemption fees of 0.25% on non-ETF shares to defray the
transaction costs and taxes associated with buying and selling
foreign real estate securities.
According to Lipper, international real estate mutual funds have
an asset-weighted expense ratio of 1.31% on average.
'Modest exposure to real estate investments in a broadly
diversified investment portfolio can help moderate overall
portfolio volatility and serve as a hedge against inflation,' said
Vanguard's chief investment officer Gus Sauter. 'With international
real estate securities representing a growing portion of the
overall real estate market, a counterpart to our domestic REIT
Index Fund is a natural addition to our index fund
VNQI'sunderlying benchmark is a free-float-adjusted,
market-capitalization-weighted index that measures the equity
market performance of 425 international real estate securities from
35 developed and emerging markets.
REITs and REOCs are companies that purchase office buildings,
hotels, and other real estate property. These securities offer
investors an alternative to direct ownership of real estate
properties. Since REITs and REOCs often perform differently than
the overall equity and fixed income markets, they may offer some
diversification to a portfolio already made up of stock and bond
At the end of September, Vanguard managed $125.87 billion in 62
, the PIMCO Broad US Treasury Index Fund (NYSEArca: TRSY) was
introduced last week.
TRSY follows the BofA Merrill Lynch US Treasury Index and the
average duration of bonds within the fund is currently 7.047
The fund's annual expense ratio is 0.15%.
PIMCO manages $1.30 billion in ETF assets.