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VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Sat Dec 13, 2014 12:31 pm
by A Boglehead
May I ask if you have any opinion re: VNQ versus FSRVX?

I have about $17,000 to invest in a 401k held at Fidelity.

I've read lots of good things about VNQ, but almost nothing about FSRVX, maybe because it's only been around since 2011.

It'll cost $7.95 to buy and sell VNQ, whereas it's free to invest in FSRVX.

I'm planning to hold it 25 y or so.

Thanks!

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Sat Dec 13, 2014 2:46 pm
by lack_ey
I don't have any special insights here, just looking around for the obvious stuff.

Vanguard's VNQ tracks the MSCI U.S. Reit index, whereas Fidelity's FSRVX tracks the Dow Jones U.S. Select Real Estate Securities Index. Both seem to track the respective indices pretty well, so it's a matter of how similar those are. Based on Morningstar's data, the VNQ has very slightly smaller and value-oriented companies than FSRVX, but really, the difference is slight. So far, the two have a correlation of about 0.99 and run the same values compared to other asset classes, so as far as diversification goes they're equivalent. Currently VNQ has a bit of a higher dividend yield, but I don't know if that would be persistent. Since FSRVX opened, VNQ's done slightly better, but that can probably mostly be attributed to randomness (that said, a small amount could be the fact that VNQ has a slightly higher percentage of assets, 99.9% as opposed to 99.2% right now, actually invested and not in short-term reserves, among other things). I wouldn't read much into that either.

VNQ has an expense ratio of 0.10%, while FSRVX is at 0.09% now, it looks like, so costs are similar. VNQ is large and liquid enough that I don't think it's much an issue in terms of bid/ask spreads and such. For what it's worth, part of you hearing about VNQ more could be the difference in size: VNQ is $26.6 billion in assets, while FSRVX is $0.4 billion.

I guess it comes down to the $8 trades, especially if you make regular purchases or sell any for rebalancing. I don't think there's a huge reason to favor one or the other otherwise, but I could easily be very wrong.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Sat Dec 13, 2014 3:18 pm
by acejacksingh
A Boglehead wrote:May I ask if you have any opinion re: VNQ versus FSRVX?

I have about $17,000 to invest in a 401k held at Fidelity.

I've read lots of good things about VNQ, but almost nothing about FSRVX, maybe because it's only been around since 2011.

It'll cost $7.95 to buy and sell VNQ, whereas it's free to invest in FSRVX.

I'm planning to hold it 25 y or so.

Thanks!
I've held VNQ for some time now and love it. I do have an account with VG so I don't pay the commission on trades (huge +). Also VNQ pays Dividends every qtr and I believe it yields ~3.5% so it's a great way to generate some income.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Thu Dec 18, 2014 1:04 am
by A Boglehead
Thank you!

It seems they're similar.

I'm leaning towards VNQ since it has more money so I figure more people prefer it, has been around longer so the manager(s) have more experience, and seems to capture more of the market.

I really appreciate your input. It can be hard to find objectivity.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Thu Dec 18, 2014 2:01 am
by livesoft
If this is a 401(k), then I would use FSRVX hands down. No commissions and the ability to invest a dollar amount regularly without worry.

I would not plan to hold 25 years though unless you meant you would also be rebalancing during that time.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Thu Dec 18, 2014 5:41 am
by IPer
I hold a REIT slice in VNQ. I trust it a bit more than the Fidelity offering, mostly because of the asset base and secondarily because it is Vanguard. I like how the fund
performs.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Tue Jan 10, 2017 1:54 pm
by rgs92
I am curious why there is a large difference in the dividend yields:
FSRVX: 2.53%
VNQ: 4.08%
IYR : 4.4% (IShares Real Estate ETF) (according to Yahoo Finance)

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Tue Jan 10, 2017 5:30 pm
by Vegomatic
And the Yahoo! # is consistent with data on Fido's own website.

https://fundresearch.fidelity.com/mutua ... /316146240

Code: Select all

Date 	   Per Share Amount      	Reinvestment Price
12/16/16 	$0.19734                  $15.21
09/09/16 	$0.08543                  $15.90
06/03/16 	$0.09359                  $15.65
03/04/16 	$0.01957                  $14.94 
and -roughly - since I don't see the yields on Fido's own site 20¢ + 9¢ + 9¢ + 2¢ = 40¢, and $0.40 / $15.21 = 2.6%

What happened to the March 2016 distribution - only 2¢? I guess it's OK if the underlying funds have varying distributions by quarter.

See below. Although the dates of the respective Annual Reports don't match up (JUL vs JAN, as noted below) the NII of the VG fund is consistently higher than that of Fido's, even though the VG E.R. exceeds Fido's by 1 to 3 bps per year. Is this simply due to mismatch of the reporting periods?

Also, I see that VG's MSCI index (from VG A/R) has about 150 stocks, and that VG is close to full replication. Fido uses a DJ Index, which (if it uses full replication, does it?) would seem to have about 100 stocks, since that is what the Fido fund holds, per M*.

Simply due to differences in Index? Perhaps someone with actual knowledge re: the funds, rather than a guesser like me, will weigh in....

FSRVX Year Ending JUL 31

Code: Select all

                                  2016     2015     2014     2013                   
Expenses net of all reductions 	0.09% 	0.09% 	0.09% 	0.09% 	 
Net investment income (loss)      2.67% 	2.41% 	2.47% 	2.28% 
VGSLX Year Ending JAN 31

Code: Select all

                                  2016     2015     2014     2013                   
Expenses                  	     0.12% 	0.12% 	0.10% 	0.10% 	 
Net investment income (loss)      2.80% 	2.70% 	2.65% 	2.53% 
Vanguard's fund has similarly 'uneven' distributions: https://personal.vanguard.com/us/funds/ ... =INT#tab=4
but in no case is one

... along with this disclaimer, re: the difficulty of calculating yield: https://personal.vanguard.com/us/FundsY ... undId=5123

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Tue Jan 10, 2017 5:58 pm
by PFInterest
tagged for interest.

Re: VNQ versus FSRVX? [Vanguard vs. Fidelity REIT Index]

Posted: Tue Jan 10, 2017 11:53 pm
by rgs92
Thanks for that comprehensive analysis. I appreciate all the work you did. Quite a mystery.