Vanguard Group, the Valley Forge, Pa.-based pioneer of the indexing movement, today launched a real estate fund that canvasses property markets outside the U.S. in both the developed and developing worlds. The Vanguard Global ex-U.S. Real Estate ETF (NYSEArca: VNQI) will invest in real estate investment trusts (REITs) and real estate operation companies (REOCs). The new ETF amounts to a non-U.S. counterpart to its existing fund, the Vanguard REIT ETF (NYSEArca: VNQ), which had about $6.9 billion in assets as of last Friday, according to data compiled by IndexUniverse.com.
Domestic assets represent only 30 percent of the global real estate market, while overseas assets represent 70 percent. Investors wishing to hold a market-weighted global real estate portfolio could invest in the two funds proportionally, Vanguard said in a prepared statement.
“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,” Gus Sauter, Vanguard’s chief investment officer, said in the statement.
VNQI will attempt to replicate the S&P Global ex-U.S. Property Index, a free-float-adjusted, market-capitalization-weighted index that measures the equity market performance of 425 international real estate securities from 35 developed and emerging markets.
The ETF has an expense ratio of 0.35 percent.
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