Investing directly in the real estate sector may appear to be an expensive proposition for most investors. This is where mutual funds come in, offering a cost effective method of investing in this industry. Real estate funds also offer significant protection against inflationary pressures. Research has shown that they perform better on this front compared to gold and other precious metals. Including funds from this sector in a well diversified portfolio helps increase returns while reducing the risk factor as a whole.
Below we will share with you the 5 best performing real estate mutual funds year to date. To view the Zacks Rank and past performance of all real estate funds, then click here.
| Mutual Fund | Zacks Rank | Total Return YTD |
|---|---|---|
| American Century Real Estate | #1 Strong Buy | 11.6% |
| Delaware Real Estate Investment Trust II | #1 Strong Buy | 10.7% |
| GMO Real Estate III | #1 Strong Buy | 10.5% |
| Delware REIT A | #1 Strong Buy | 10.1% |
| Goldman Sachs | #1 Strong Buy | 9.8% |
American Century Real Estate (REACX) seeks current income and capital growth. The fund invests a large proportion of its assets in real estate investment trusts and companies from the sector. The fund focuses on acquiring common and preferred stock and related convertible securities. The real-estate mutual fund has a three year annualized return of 22.15%.
Steven R. Brown is the Fund Manager and he has been managing this real estate mutual fund since 2008.
Delaware Real Estate Investment Trust II (DPRTX) utilizes a large proportion of its assets to purchase equity securities issued by real estate investment trusts and companies. The fund may also invest in short term debt securities and money market instruments. The real-estate mutual fund has a three year annualized return of 19.5%.
The real estate mutual fund has an expense ratio of 0.95% compared to a category average of 1.39%.
GMO Real Estate III (GMORX) seeks total return. The fund invests the majority of its assets in real estate investment trusts and related investments. The fund seeks to provide returns in excess of its benchmark, the MSCI U.S. REIT Index. The real-estate mutual fund is non-diversified and has a three year annualized return of 20.59%.
Sam Wilderman is the Fund Manager and he has been managing this real estate mutual fund since 2008.
Delaware REIT A (DPREX) invests at least 80% of its assets in real estate investment trusts. The fund also invests a substantial portion of its assets in securities issued by firms from the real estate sector. The real-estate mutual fund has a three year annualized return of 19.55%.
As of November 2011, this real estate mutual fund held 49 issues, with 12.08% of its total assets invested in Simon Property Group, Inc.
Goldman Sachs US Real Estate A (GREAX) seeks capital appreciation and dividend income. The fund utilizes a large proportion of its assets to purchase equity securities of companies from the real estate sector or those with linkages to the industry. The real-estate mutual fund has a three year annualized return of 20.86%.
The real estate mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.44% compared to a category average of 1.39%.
To view the Zacks Rank and past performance of all real estate mutual funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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