Vanguard has launched an international real estate index fund with ETF shares based on the S&P Global ex-US Property Index.
The fund will invest in real estate investment trusts and real estate operating companies in emerging markets and developed markets outside the US.
The new fund and ETF will complement the Vanguard Reit Index Fund, which holds domestic real estate securities.
Vanguard Global ex-US Real Estate Index Fund will offer four share classes: investor shares (with an estimated expense ratio of 0.50 per cent); institutional shares (0.30 per cent); signal shares (0.35 per cent); and ETF shares, ticker symbol VNQI (0.35 per cent).
“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,” says 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 lineup.”
The fund will attempt to replicate the S&P Global ex-US Property Index, a free float adjusted, market capitalisation weighted index that measures the equity market performance of 425 international real estate securities from 35 developed and emerging markets.
The minimum initial investment requirement is USD3,000 for Investor shares. Institutional shares and signal shares will be available for eligible institutional investors, and ETF shares may be purchased through a broker.