Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard REIT Index ETF (NYSE: VNQ ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Vanguard REIT and see what CAPS investors are saying about the ETF right now.
Vanguard REIT facts
|Total Assets||$8.5 billion|
|Investment Approach||Seeks to track the performance of the MSCI REIT Index, which covers approximately two-thirds of the U.S. REIT market|
|1-Year / 3-Year / 5-Year Annual Returns||2.9% / 15.7% / (1.3%)|
|Best YTD Performers Among Top 10 Holdings||
Simon Property Group (NYSE: SPG ) (+23.7%)
Public Storage (NYSE: PSA ) (+20.7%)
Equity Residential (NYSE: EQR ) (+11.1%)
iShares Dow Jones U.S. Real Estate Index (NYSE: IYR )
iShares Cohen & Steers Realty Majors Index (NYSE: ICF )
Sources: Morningstar and Motley Fool CAPS as of Oct. 21.
On CAPS, 84% of the 272 members who have rated Vanguard REIT believe the ETF will outperform the S&P 500 going forward. These bulls include All-Stars marc64 and starbucks4ever, both of whom are ranked in the top 5% of our community.
A few months ago, marc64 tapped Vanguard REIT as a timely opportunity:
Capital is king; the ongoing real estate meltdown has created profitable opportunities for the sharks that make money efficiently managing real assets. ... [I]ncomes made in any economic recovery are to some significant extent permanently shifting from paying off mortgage banks to landlords.
Vanguard REIT, in particular, sports a paltry expense ratio of 0.12%. That's lower than that of alternatives such as iShares Dow Jones U.S. Real Estate (0.47%) and iShares Cohen & Steers Realty Majors (0.35%).
CAPS All-Star starbucks4ever offers guidance on how to play the ETF:
VNQ beats S&P hands down. Not all REITs in VNQ are worth buying. But that's OK, as the index goes up, those worthless companies with stupid management will go up even faster than the better managed ones. Retail and industrial REITs will slow down the progress of VNQ, but they will not stop it because the bottom is in. ... Always stand directly in the path of the money flow from Bernanke&Co, buying the things they are going to inflate next. Just don't be too late to the game, grab those big and small bubbles when they are in the formative stage, and don't become a hog holding VNQ past $100.
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