No Real Estate Stocks In U.S. Total Stock Market?

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spirogruf
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No Real Estate Stocks In U.S. Total Stock Market?

Post by spirogruf »

Hi, I was just looking up the Vanguard Total U.S. Stock Market Index VTSMX and didn't notice any Real Estate Stocks. Are they actually under any of the categories below?

Equity Sector Diversification

Basic Materials 2.70% 2.70%
Consumer Goods 9.80% 9.80%
Consumer Services 14.00% 14.00%
Financials 19.00% 19.10%
Health Care 14.40% 14.30%
Industrials 12.30% 12.30%
Oil & Gas 7.20% 7.20%
Other 0.00% —
Technology 15.70% 15.70%
Telecommunications 2.00% 2.00%
Utilities 2.90% 2.90%
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LAlearning
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by LAlearning »

They are there. I think it's pegged around 2%, but I haven't looked.
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livesoft
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by livesoft »

Yes. Check out the list of investments in the most recent annual report.
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lack_ey
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by lack_ey »

Looks like they're lumping them into financials.

Check sector breakdowns at another source like Morningstar:
http://portfolios.morningstar.com/fund/summary?t=VTSAX

Looking at the list of holdings in the annual report:
http://www.vanguard.com/funds/reports/q850.pdf
That includes such names as Simon Property Group Inc. (SPG), Public Storage (PSA), Equity Residential (EQR), and Health Care REIT Inc. (HCN).
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InvestorNewb
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by InvestorNewb »

It falls under the "financials" sector.

Simon Property Group Inc, for instance, falls under: Sector: Financials > Industry: Retail REITs
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by abuss368 »

Yes approximately 4%.

In August 2016, Equity REITs will have their own section. No Mortgage REITs.
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spirogruf
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by spirogruf »

Would having a tilt towards an REIT (say 10% of your stock section) protect your stock portion from an unanticipated spike in inflation and jump in interest rates like with what happened in the 1970's, or when interest rate do go up?
livesoft
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by livesoft »

No. Many REITs are leveraged (they borrow lots of money), so when interest rates go up, REIT stocks drop in value since their borrowing costs go way up.
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Re: No Real Estate Stocks In U.S. Total Stock Market?

Post by nisiprius »

http://www.bogleheads.org/wiki/Percenta ... ndex_funds

It seems to be original research by Barry Barnitz. It's out of date, but it says REITS comprised 2.31% of Total Stock in 2009.

REITs are stocks. Don't confuse them with direct investments in real estate. They do have some special characteristics, such as a requirement that they pay out all of... something... in dividends, and therefore are high-dividend-paying stocks.
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