Vanguard Commodity Funds
Before you invest in the Vanguard Commodity Funds you must first understand what you are investing in. these are not the same type of investment as stocks, bonds or EFTs. Investing in a commodity is the investor obtaining a real asset that holds value that fluctuates with inflation.
When you invest in the commodity index, you are making an investment in what the future price of the commodity will be. This is where the risk lies in the commodity investment.
Two of the Vanguard Funds that are in the commodity investment strategies are the Vanguards Materials ETF (VAW) and the Vanguard REIT Index ETF (VNQ).
The VAW has its holdings in Industrial materials mainly that compose 82.3% of the assets. This includes 44% in chemicals with 29% in metals and mining and 8% in packaging and containers. This ETF has an average daily trading volume of 109k with an expense ratio of 0.25%. It presently has an YTD performance of 14.45% and for the year 2009 it was 51.44%. The volatility factors are a beta at 0.97, the R squared at 92 and the standard deviation of 31.01.
The VNQ has its investments in the real estate market that include hotels and office buildings. 99.9% of this fund has its assets thru the investments of finaical service companies that have purchased the real estate. The average trading volume is 2.7 million and the expense ratio is only 0.13%. The YTD performance is 23.73% and for 2009 it was 30.07%. The volatility factors are a beta at 0.96, the R squared is 100 and the standard deviation is 40.42.
Both of these Vanguard Commodity Funds are solid investments that can help round out any investor’s portfolio.
For more reference about investments from Vanguard on this site please Vanguard Admiral Shares Guide.
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