Mutual funds investing the real estate sector should be a necessary addition to portfolios with a long term horizon even though the sector has traversed rough waters in the recent past. Real estate mutual funds have delivered significantly high returns in the past and offer a convenient method for investing in this sector. With their low initial investment requirements, well diversified portfolios and professional management they can go a long way in lowering the risk involved. They also bring stability and steady returns to portfolios over the long term.
Below we will share with you 5 top rated real estate mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all real estate funds, then click here.
Goldman Sachs US Real Estate A (GREAX) seeks capital appreciation and current income. At least 80% of its assets are used to purchase equity securities of companies from the real estate sector or those with linkages to the industry. The real estate mutual fund returned 52.51% over the last one year period.
David Kruth is the fund manager and he has managed this real estate mutual fund since 2005.
First American Real Estate Securities A (FREAX) primarily invests in publicly traded companies from the real estate sector. The fund focuses on acquiring income-generating common stock, but may also invest in derivatives in order to mitigate risk. The real estate mutual fund has a five year annualized return of 3.61%.
The real estate mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.27% compared to a category average of 1.51%.
American Century Real Estate (REACX) seeks a high level of total return. It invests heavily in equity securities of real estate investment trusts and companies from the real estate industry. The real-estate mutual fund returned 52.79% over the last one year period.
Steven R. Brown is the Fund Manager and he has been managing this real estate mutual fund since 2008.
Cohen & Steers Realty Shares (CSRSX) invests the majority of its assets in equity securities of real estate companies. It invests in common and preferred stock, convertible securities and shares of real estate investment trusts. The real-estate mutual fund returned 51.85% in the last one year period and has a ten year annualized return of 10.34%.
As of June 2010, this real-estate mutual fund held 56 issues, with 9.61% of its total assets invested in Simon Property Group, Inc.
RiverSource Real Estate A (ARLAX) seeks current income and capital growth. It invests the majority of its assets in securities issued by companies from the real estate sector. The fund purchases equity securities of real estate investment trusts as well as companies. The real-estate mutual fund returned 51.24% over the last one year period.
The real estate mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.43% compared to a category average of 1.51%.
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/mutualfund/
