Top 5 Best Performing Real Estate Mutual Funds (Jan. 2011)

Investments in the real estate sector provide excellent protection against inflationary pressures. This is why they should necessarily be part of portfolios with a long term horizon and aid in diversification. Additionally, they lend stability to a portfolio, despite the difficult phase real estate has passed through recently. This is because the volatility in property prices is far less compared to the kind experienced by stocks over the longer term. Real estate funds offer a cost effective and convenient method of holding these investments.

Below we will share with you the 5 best performing real estate mutual funds year to date.

Mutual Fund Zacks Rank Total Return YTD
Profunds Real Estate Ultrasector #3 Hold 26.0%
Natixis AEW Real Estate A #2 Buy 22.2%
ING Real Estate A #1 Strong Buy 22.0%
Cohen & Steers Realty Income A #3 Hold 21.5%
Oppenheimer Real Estate A #3 Hold 21.0%

ProFunds Real Estate UltraSector (REPSX) invests at least 80% of its assets in equity securities which are included in the Dow Jones U.S. Real Estate index. The fund may also purchase securities which are identical in nature and may utilize sample techniques to meet its objectives. The real estate mutual fund returned 38.76% over the last one year period.

The real estate mutual fund has an expense ratio of 2.72% compared to a category average of 1.49%.

Natixis AEW Real Estate A (NRFAX) seeks capital appreciation and above average income. It invests heavily in shares of real estate investment trusts whose primary income is derived from rent of properties. The real-estate mutual fund returned 31.33% over the last one year period.

Matthew A. Troxell is the Fund Manager and he has been managing this real estate mutual fund since 2000.

ING Real Estate A (CLARX) invests at least 80% of its assets in common and preferred stocks of real estate companies and real estate investment trusts. It is non-diversified and may also invest in convertible securities and IPOs. The real-estate mutual fund has a five year annualized return of 3.2%.

As of September 2010, this real estate mutual fund held 45 issues, with 10.17% of its total assets invested in Simon Property Group, Inc.

Cohen & Steers Realty Income A (CSEIX) seeks current income and long-term capital growth. The fund invests the majority of its assets in equity securities of real estate companies. Not more than 20% of its assets may be utilized to purchase debt securities, including high-yield debt. The real-estate mutual fund has a ten year annualized return of 10.17%.

The real estate mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.39% compared to a category average of 1.49%.

Oppenheimer Real Estate A (OREAX) invests heavily in common stocks and other equity securities of real estate firms. The fund focuses on investing in real estate investment trusts, but may also invest in operating companies and other related securities. The real estate mutual fund is non-diversified and has returned 29.15% over the last one year period.

Scott C. Westphal is the Fund Manager and he has been managing this real estate mutual fund since 2002.

To view the Zacks Rank and past performance of all real estate mutual funds, then click here.

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