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SDbearParticipant
Powayseller,
Vanguard’s CA tax exempt Money Market does not contain any MBSs or Agency securities (Freddie Mac, Fannie Mae et.al). I checked with Vanguard on their exposure to real estate. They mentioned that 17.36% of their funds are invested in private ..(something).. bonds (bonds issued by CA govt to build private assets like stadiums). But they are still debt instruments that the CA govt is liable for. So I think they have the same risk exposure as the T-bills from treasury direct.SDbearParticipantWhen I said valuations I meant stocks of REIT might have had a run up due to speculation. When I said they are not exposed to the malaise, I meant they might be less leveraged than individual home owner.
Powayseller,
You are right when you said that their occupancy rates would decrease heavily if economy grinds to a halt. But I’m not so bearish on the economy.
Chris,
You gave a good insight on the local REIT performance during the last downturn.I was looking at their performance nationally. May be performance of the MSCI REIT Index. I was wondering if anyone has researched on their financial state.
Powayseller,
I would appreciate it if you would give us a summary of the report you read.I was looking at the Vangaurd REIT index fund. But it’s inception was in 1996. So I could’nt figure out how the fund performed during the last downturn. I could’nt get the index performance during the downturn too. All I found was that the index had an annualized return of 15.40% in the past 10yrs.
If they do not go down in value too much and have decent yield, I could have some exposure to it. An annualised 10% return is still a very good option.
Thanks in advance.SDbearParticipantDocteur,
I did a quick comparison between the vanguard funds and equivalent IFA funds. For the large cap funds IFA had smaller expense ratios with lesser returns than Vanguard. For small caps IFA had much higher expense ratios than vangaurd but a higher return. I agree vanguard funds are not the cheapest index funds available. But I found IFA funds expensive too. For instance Spartan’s S&P500 fund had only 0.07% expense ratio as against vanguard 0.18% or IFA’s 0.15%. Am I missing something here? Also the index growth both websites quoted for the same indices were different. Is there any specific reason you chose IFA over Vanguard?Powayseller mentioned that the vanguard money market can contain GSEs. I have some money in Vanguard’s CA tax exempt money market. I get slightly better returns here than from the T-Bills that treasurydirect offers (after tax considerations). But if they have exposure to the GSEs, I would prefer to move them over. The Vanguard prospectus said that the fund contains mainly california municipal securities. Their holdings also does’nt explicitly state GSEs or related derivatives / MBSs. How do I recognize these in any fund’s holdings?
Thanks in advance,
SDBear -
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