Yahoo Finance linked article: 5 mins with Vanguard REIT mgr

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peteyperson
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Yahoo Finance linked article: 5 mins with Vanguard REIT mgr

Post by peteyperson »

Basic information interview/article from the manager of the Vanguard REIT index fund. More of a useful article for newbie lurkers on nofeeboards than the veterans..

http://flagship.vanguard.com/VGApp/hnw/ ... 3_ALL.html

Petey
WiseNLucky
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Post by WiseNLucky »

Thanks, Petey! Very informative article.
WiseNLucky

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peteyperson
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Post by peteyperson »

Oh well good. First I posted it, then read it and found it to be too basic for most here. But I think we have a lot of lurkers who rarely if ever post so I'm mindful to add things for those getting started on the path to learning about FIRE. Read a couple of comments from people saying that most of what we discuss goes right over their head, so hopefully this kind of thing has merit. We were all newbies once! :lol:

Petey
WiseNLucky wrote: Thanks, Petey! Very informative article.
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BenSolar
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Re: Yahoo Finance linked article: 5 mins with Vanguard REIT

Post by BenSolar »

Nice illustration of the benefits of investing in a low cost index fund:
Over the five-year period ended June 30, 2003, the fund's average expense ratio was 0.29% and its average annual rate of return was 7.37% (before expenses) and 7.06% after expenses.

A $10,000 investment in a fund with these averages would cost an investor $205 in operating expenses over a five-year period. Operating expenses would total $1,147 over the same period for a hypothetical fund in REIT Index Fund's peer group, which had an average expense ratio of 1.60% and an average annual rate of return of 8.49% (before expenses) and 6.93% after expenses.


Though the index underperformed over 5 years before expenses, it came out ahead after expenses.
"Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things only hoped for." - Epicurus
peteyperson
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Re: Yahoo Finance linked article: 5 mins with Vanguard REIT

Post by peteyperson »

Yes, I noticed on the fund summary page at Vanguard that it was the first time it had real data that gave you what you needed to know about the fund. You see Morningstar results annualised over 5 years, but cannot include the effect of the sales load, nor the annual charge, making the figure nominal and not really useful.

The Vanguard level of openness is impressive. The interview continued that trend. It makes you impressed with their integrity more than anything else, something that came through clear from Bogle's Common Sense book. Nice to see it not just being paid lip service.
BenSolar wrote: Nice illustration of the benefits of investing in a low cost index fund:
Over the five-year period ended June 30, 2003, the fund's average expense ratio was 0.29% and its average annual rate of return was 7.37% (before expenses) and 7.06% after expenses.

A $10,000 investment in a fund with these averages would cost an investor $205 in operating expenses over a five-year period. Operating expenses would total $1,147 over the same period for a hypothetical fund in REIT Index Fund's peer group, which had an average expense ratio of 1.60% and an average annual rate of return of 8.49% (before expenses) and 6.93% after expenses.


Though the index underperformed over 5 years before expenses, it came out ahead after expenses.
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