For most investors, investing directly in the real estate sector may appear to be an exorbitant proposition. Mutual funds are one of the most convenient and cost effective methods of investing in this industry. This category of funds also offers significant protection against inflationary pressures. In fact, several studies have shown that real estate funds deliver better results on this count compared to precious metals. The presence of funds from this category in a well diversified portfolio ensures higher returns while reducing the risk factor as a whole.
Below we will share with you 5 top rated real estate funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all real estate funds, then click here.
Oppenheimer Real Estate A (OREAX) seeks total return. The majority of the fund’s assets are used to purchase equity securities, such as common stocks of companies form the real estate sector. It may also consider parking funds in real estate operating companies. The real-estate fund returned 52.03% over the last one year period.
Scott C. Westphal is the Fund Manager and he has been managing this real estate fund since 2002.
Ivy Real Estate Securities A (IRSAX) invests at least 80% of its assets in real estate companies or companies with linkages to the sector. The fund invests in both domestic and foreign securities regardless of their size or market capitalization. The fund has a ten year annualized return of 9.31%.
The real estate fund has a minimum initial investment of $500 and an expense ratio of 2.09% compared to a category average of 1.51%.
Franklin Real Estate Securities A (FREEX) seeks both current income and capital growth. Real estate investment trusts and companies which derive at least half of their revenues from operations in the real estate sector constitute its major investments. The real-estate fund returned 49.31% over the last one year period.
Jack Foster is the Fund Manager and he has been managing this real estate fund since 2008.
Fidelity Real Estate Income (FRIFX) invests heavily in preferred and common stocks of real estate investment trusts. Debt securities of real estate companies as well as related asset backed securities constitute its other major investments. It selects debt securities which have relatively lower ratings. The fund has a five year annualized return of 2.89%.
As of April 2010, this real estate fund held 334 issues, with 7.81% of its total assets invested in Fidelity Revere Str Tr.
Davis Real Estate A (RPFRX) seeks long term capital growth and current income. The majority of the fund’s assets are used to purchase securities of companies whose major operations are related to real estate. The real-estate fund returned 46.58% over the last one year period and has a ten year annualized return of 7.79%.
The real estate fund has a minimum initial investment of $1,000 and an expense ratio of 1.35% compared to a category average of 1.51%.
To view the Zacks Rank and past performance of all real estate 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/mutualfund/
