Even though real estate has been through tough times recently, securities from this sector should continue to be an integral part of portfolios with a long term horizon. Over the years, mutual funds from this category have continued to perform favorably. They offer a convenient method to invest in real estate because of low initial investment requirements and the advantage of professional management. Investors willing to hold long term positions would do well to consider these funds as they add stability and bring steady returns to a portfolio.
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.
Fidelity Real Estate Income (FRIFX) seeks appreciably high income. The fund 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. The real estate mutual fund has a three year annualized return of 9.46%.
The real estate mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.96% compared to a category average of 1.45%.
ING Clarion Global Real Estate S2 (IRGSX) invests a large proportion of its assets in equity securities of real estate companies. The fund invests in companies located worldwide as well as domestic firms. The real-estate mutual fund has a five year annualized return of 2.4%.
Steven D. Burton is the fund manager and he has managed this real estate mutual fund since 2006.
Principal Global Real Estate Securities A (POSAX) seeks current income and capital growth. The fund invests heavily in real estate equity securities of domestic and foreign companies. The fund may invest without limit in a single country or securities denominated in one particular currency. The real-estate mutual fund returned 22.89% over the last one year period.
The real estate mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.45% compared to a category average of 1.50%.
Cohen & Steers Realty Shares (CSRSX) invests a large proportion 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 has a ten year annualized return of 12.31%.
As of March 2011, this real estate mutual fund held 58 issues, with 9.40% of its total assets invested in Simon Property Group, Inc.
Delaware Pooled Global Real Estate Securities (DGROX) seeks total return. The fund invests the majority of its assets in domestic and foreign real estate securities. Not more than 40% of its assets may be utilized to purchase foreign securities. The real-estate mutual fund returned 22.6% over the last one year period.
Damon Andres is the fund manager and he has managed this real estate mutual fund since 2007.
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.