Is Vanguard REIT Index Admiraliral (VGSLX) a Strong Mutual Fund Pick Right Now?

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This story originally appeared on Zacks

Have you been searching for an Index fund? You might want to begin with Vanguard REIT Index Admiraliral (VGSLX). VGSLX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

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History of Fund/Manager

VGSLX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard REIT Index Admiraliral debuted in November of 2001. Since then, VGSLX has accumulated assets of about $25.82 billion, according to the most recently available information. The fund’s current manager, Gerard O’Reilly, has been in charge of the fund since November of 2001.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. VGSLX has a 5-year annualized total return of 8.36% and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 13.2%, which places it in the middle 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. VGSLX’s standard deviation over the past three years is 18.61% compared to the category average of 15.57%. Looking at the past 5 years, the fund’s standard deviation is 15.9% compared to the category average of 12.91%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VGSLX has a 5-year beta of 0.8, which means it is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -4.92. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VGSLX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.79%. So, VGSLX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.

Bottom Line

For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.

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