Vanguard VIF Real Estate Index Portfolio
The Portfolio seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments.
The Portfolio employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Real Estate 25/50 Index. The Index is made up of stocks of large, mid-size, and small U.S. companies within the real estate sector, as classified under the Global Industry Classification Standard (GICS). The GICS real estate sector is composed of equity real estate investment trusts (known as REITs), which includes specialized REITs, and real estate management and development companies. The Portfolio attempts to replicate the Index by investing all, or substantially all, of its assets in the stocks that make up the Index, holding each stock in approximately the same proportion as its weighting in the Index.
An investment in the Portfolio could lose money over short or long periods of time. You should expect the Portfolio's share price and total return to fluctuate within a wide range. The Portfolio is subject to the following risks, which could affect the Portfolio's performance:
- Industry concentration risk, which is the chance that the stocks of REITs and other real estate-related investments will decline because of adverse developments affecting the real estate industry and real property values. Because the Portfolio concentrates its assets in these stocks, industry concentration risk is high.
- Stock market risk, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. The Portfolio's target index may, at times, become focused in stocks of a limited number of companies, which could cause the Portfolio to underperform the overall stock market.
- Asset concentration risk, which is the chance that, because the Portfolio's target index (and therefore the Portfolio) tends to be heavily weighted in its ten largest holdings, the Portfolio's performance may be hurt disproportionately by the poor performance of relatively few stocks.
- Interest rate risk, which is the chance that REIT stock prices overall will decline, and that the cost of borrowing for REITs will increase because of rising interest rates. Interest rate risk is high for the Portfolio.
- Investment style risk, which is the chance that returns from REIT stocks—which typically are small- or mid-capitalization stocks—will trail returns from the overall stock market. Historically, REIT stocks have performed quite differently from the overall market.
An investment in the Portfolio is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
| period | value |
|---|---|
| Year to Date | -11.95% |
| period | value |
|---|---|
| Prior 3 Months | 7.61% |
| period | value |
|---|---|
| Prior 1 Year | -6.54% |
| Prior 3 Years | 1.71% |
| Prior 5 Years | 3.59% |
| Prior 10 Years* | 5.38% |
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and unit values will fluctuate so that units, when redeemed, may be worth more or less than their original cost. Investment Fund total return performance currently may be lower or higher than the figures stated above.
The total return performance data are based on a hypothetical investment of $1,000, which is redeemed at the end of the periods shown. The total return figures reflect the reinvestment of investment income and capital gains and losses, and are net of expenses which include a contract fee, an expense risk fee, administrative charges, a distribution expense charge and Underlying Funds fees and expenses.
The total return figures for periods extending beyond a year are average rates of return and do not reflect the Funds' actual year-to-year results, which varied over the periods shown. Contributions or withdrawals made within a period would experience different rates of return based on the unit values on the dates of such transactions.
Portfolio Turnover Rate(%): 10%**Excludes all short-term securities.
| Industry | % of Portfolio |
|---|---|
| Diversified REITs | 4.7% |
| Industrial REITs | 7.2% |
| Office REITs | 9.9% |
| Residential REITs | 14.0% |
| Retail REITs | 14.1% |
| Specialized REITs | 32.4% |
| Hotel & Resorts REITs | 4.8% |
| Health Care REITs | 9.5% |
| Real Estate Operating Cos. | 0.3% |
| Real Estate Development | 0.4% |
| Real Estate Services | 2.6% |
| Diversified Real Estate Activities | 0.1% |
| Company | % of Portfolio |
|---|---|
| American Tower corp. | 7.5% |
| Simon Property Group Inc. | 4.9% |
| Crown Castle International Corp. | 4.6% |
| Prologis Inc. | 3.9% |
| Equinix Inc. | 3.2% |
| Public Storage | 3.0% |
| Welltower Inc. | 2.5% |
| Equity Residential | 2.4% |
| AvalonBay Communities Inc. | 2.4% |
| Digital Realty Trust Inc. | 2.1% |
Gerard C. O'Reilly, Principal of Vanguard. He has been with Vanguard since 1992, has managed investment portfolios since 1994, and has managed the Portfolio since its inception in 1999 (co-managed since 2016). Education: B.S., Villanova University.