Vanguard Real Estate ETF (VNQ) is one of the cheapest real estate funds available, with an expense ratio of 0.12%. It features experienced management and an excellent record of tracking its index. It is a fine option in its niche, earning a Morningstar Analyst Rating of Silver.
Until early February 2018, the fund tracked the MSCI US REIT Index, which holds domestic-equity REITs, or firms that manage properties and collect rent. That index doesn't include mortgage REITs, which invest in mortgages and mortgage-backed securities rather than actual properties, nor does it include non-real-estate specialty REITs, such as timber or cell-tower REITs.
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Ben Johnson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.