The Vanguard REIT: Why Buy It?

The Vanguard REIT index fund, ticker symbol VGSIX, has delivered 10.76% annual returns since its inception on May 13, 1996. The Vanguard REIT paid out $1 per share last year in distributions, with some of the payments being dividends (cash generated from the business) and some being returns of capital (non-taxable even in a taxable account until the amount of return of capital exceeds the original investment; at current rates, you wouldn’t have to worry about paying a return on capital tax unless you held this fund in a taxable account for over fifty years).

The total amount of cash that a Vanguard REIT investor receives over the full year is currently 4.16% given the market price of $24.02 for the fund shares. For a lot of people, REIT investing is an area where it can make sense to go the index fund route because route because the quality of … Read the rest of this article!