VGSLX vs FSRNX vs FRESX: Costs, Holdings and Tax Character (2026)

What we read, and what the premise got wrong

We read the funds' own filings, not a quote page: the summary prospectuses (Form 497K, May 28, 2026) for Vanguard's Admiral, Investor and Institutional classes, the Form N-CSR for the year ended July 31, 2026 of Fidelity Real Estate Index Fund (FSRNX) and Fidelity Real Estate Investment Portfolio (FRESX), Vanguard's Forms N-CSR and N-CSRS (years ended January 31, 2026 and six months ended July 31, 2026), and four Forms N-PORT for July 31, 2026 (Vanguard Real Estate Index Fund, Vanguard Real Estate II Index Fund, FSRNX and FRESX). For the non-traded comparison we used BREIT's Form 10-K for 2025.

Three corrections to what searchers often assume:

1. VGSLX is not a separate portfolio from the VNQ ETF. Both are share classes of one Vanguard series; the fund offers Investor, ETF, Admiral and Institutional shares (Form N-CSRS). If you came for the ETF, our VNQ page has its quarterly payments and the comparison with BREIT, and the REIT ETF holdings page lines it up against eight other ETFs.
2. SWRSX is not real estate. Schwab's semiannual report for February 28, 2026 is for the “Schwab Treasury Inflation Protected Securities Index Fund Ticker Symbol: SWRSX”. Schwab's real estate mutual fund is the Schwab Global Real Estate Fund (SWASX): a global fund that held securities in 20 countries and cost 0.72% in its report for February 28, 2026. We leave it out of the tables because it does not hold a US REIT index.
3. We cannot tell you which fund is on your 401(k) menu. The Vanguard summary prospectus says the plan administrator or benefits office has the details for shares held through an employer plan. The plan's fee disclosure and fund list are the documents that settle it.

Cost: the part that is the same every year

The Admiral prospectus breaks the 0.13% into a 0.11% management fee, 0.01% other expenses and 0.01% acquired fund fees, and its example puts the cost of $10,000 over ten years at a 5% return at $166. The fee table says the Total Annual Fund Operating Expenses “do not correlate” to the expense ratio in the Financial Highlights, which shows 0.12% for Admiral Shares plus 0.01% of acquired fund fees. FRESX's ratio has fallen from 0.71% (year to July 31, 2022) to 0.62%, still 8.9 times FSRNX's. FRESX's report notes that Fidelity Advisor Real Estate Fund merged into it on January 23, 2026.

The ten-year column holds the balance constant at $250,000 and the ratio constant; it is a size-of-fee figure, not a forecast of what you would pay on a growing balance. The FRESX-versus-FSRNX gap at that constant balance is $13,750 over ten years. Whether FRESX earns it back is a performance question the filings answer only in part: FRESX returned 16.14%, 3.21% and 4.75% for one, five and ten years to July 31, 2026, against 15.37%, 2.55% and 3.39% for its MSCI US IMI Real Estate 25/50 Linked Index, after its fees. FSRNX returned 14.84%, 2.41% and 3.65% against 14.95%, 2.44% and 3.69% for the Fidelity Real Estate Linked Index. Those are past periods and not a prediction.

Holdings: where the 96% comes from

Vanguard Real Estate Index Fund's Form N-PORT for July 31, 2026 lists 153 lines (140 of them equity positions), and the largest is not a company: Vanguard Real Estate II Index Fund, 14.50% of net assets ($10.60 billion). The Real Estate II fund's own N-PORT shows $10.97 billion of net assets, so the Admiral/ETF series owns about 96.7% of it (our arithmetic). Replacing that line with Real Estate II's holdings, scaled to the amount held, gives a 139-line equity portfolio.

The FSRNX and FRESX columns are the funds' reported weights; the first column is our arithmetic on two N-PORT filings. For each pair we added, line by line, the smaller of the two weights (our arithmetic):

The top five lines are 33.7% of VGSLX (looked through), 31.0% of FSRNX and 40.8% of FRESX (our arithmetic). The two Fidelity reports give the sector mix as filed: specialized REITs are 31.2% of FSRNX and 32.6% of FRESX; retail REITs 15.1% and 20.7%; health care REITs 16.9% and 12.3%; real estate management and development 6.6% and 7.0%. Different benchmarks are in play: Vanguard's fund and FRESX follow the MSCI US Investable Market Real Estate 25/50 family, while FSRNX's linked index is MSCI US IMI Real Estate 25/25 (Form N-CSR), which is one reason the weights differ by a fraction. For the method behind the look-through and the nine ETF versions, see the REIT ETF holdings page.

Tax character: three funds, three different distributions

This is the table the quote pages leave out. It uses each fund's own tax statements, and it is the fund's fiscal year, not your calendar-year Form 1099-DIV.

Why the Vanguard and Fidelity index funds look different. Fidelity's note on income says: “Certain distributions received represent a return of capital or capital gain.” and that these “are recorded as a reduction of cost of investments and/or as a realized gain.” Vanguard's fund reports the return of capital as part of what it distributes. The filings do not say why the dollar outcomes differ, and we do not guess; what they show is that FSRNX's distributions in each of two years were all ordinary income, and VGSLX's roughly a quarter return of capital. The ratio of net investment income to average net assets, as filed, is 2.85% for VGSLX (year to January 31, 2026), 3.15% for FSRNX and 2.36% for FRESX (years to July 31, 2026).

Worked example (our arithmetic). Take the per-share figures against each fund's year-end NAV, $250,000 in a taxable account, and fiscal years that end six months apart. VGSLX paid $4.920 on a $128.70 NAV: 3.8%, or $9,557, of which $1.207, $2,345, was return of capital. FSRNX paid $0.48 on a $18.25 NAV: 2.6%, or $6,575, all ordinary income. FRESX paid $1.77 on a $43.54 NAV: 4.1%, or $10,163, of which $0.88 a share, about $5,053, was from net realized gain. Return of capital lowers your cost basis rather than being income in the year it is paid, and long-term gains are reported on a different line from ordinary dividends; the Form 1099-DIV instructions put “Nondividend distributions” in Box 3 and “qualified REIT dividends” and “section 199A dividends paid by a RIC” in Box 5. A higher distribution is not a better result: FRESX's figure includes gains it realized by selling holdings.

In a retirement plan or IRA the filing's own wording is that, for tax-advantaged accounts, “special tax rules apply” (Vanguard summary prospectus), and the split matters differently than in a taxable account. We do not model that here. The after-tax rows of Vanguard's prospectus, for taxable accounts, show Admiral Shares at 3.19% before taxes and 2.19% after taxes on distributions for calendar 2025, a one-point difference.

What a reader can do with this

• Put the 0.13%, 0.07% and 0.62% beside your own balance using the table above, and look at the share class on your plan menu before the ticker: VGSLX at 0.13%, VGSIX at 0.27% and VGSNX at 0.11% are one portfolio.
• Open your plan's fee disclosure and fund list. We could not confirm a specific plan's menu from the filings, so that document is the only one that says which of these classes you can hold.
• Check the fiscal year when you compare returns. Vanguard's year ends January 31 and Fidelity's July 31, so a one-year figure in each report covers a different twelve months.
• For a taxable account, read the distribution split before the yield. Return of capital (VGSLX), all ordinary income (FSRNX) and capital gains (FRESX) land on different lines of the Form 1099-DIV.
• If the alternative you are weighing is a non-traded vehicle, our Fundrise vs REITs and real estate crowdfunding vs REITs pages put the fee and liquidity differences next to a listed REIT, and the NAV REIT vs interval fund page covers the pooled alternatives. For why a distribution can be mostly return of capital, see K-1 vs 1099-DIV for real estate investments.

This is analysis of public documents, not investment, legal or tax advice. We do not recommend any fund.

FAQ

Sources: SEC EDGAR, retrieved October 22, 2026. Vanguard Specialized Funds (CIK 734383): summary prospectuses (Form 497K) of May 28, 2026, accessions 0000734383-26-000135 (Institutional), 0000734383-26-000137 (Investor) and 0000734383-26-000138 (Admiral); Form N-CSR for the year ended January 31, 2026, accession 0001104659-26-036013; Form N-CSRS for the six months ended July 31, 2026, accession 0001104659-26-112650; Form N-PORT for July 31, 2026, accession 0000734383-26-000299. Vanguard Real Estate II Index Fund: Form N-PORT for July 31, 2026, accession 0000106444-26-000505. Fidelity Salem Street Trust (CIK 35315): Form N-CSR for the year ended July 31, 2026, accession 0000035315-26-000583; Form N-PORT, accession 0000035402-26-006220. Fidelity Select Portfolios (CIK 320351): Form N-CSR for the year ended July 31, 2026, accession 0000320351-26-000424; Form N-PORT, accession 0000035402-26-006223. Schwab Capital Trust and Schwab Investments (CIK 869365): Forms N-CSRS and N-CSR of May 1, 2026, accessions 0001193125-26-201223 and 0001193125-26-201250. BREIT (CIK 1662972): Form 10-K for 2025, accession 0001662972-26-000032. IRS, Instructions for Form 1099-DIV (revised 01/2024), as published on irs.gov. Holdings overlap, look-through weights, dollar costs, shares and the worked example are our arithmetic on those documents. This is analysis of public documents, not investment, legal or tax advice.