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. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
MFS Global Real Estate A (MGLAX) seeks total return. It invests largely in both domestic and foreign investments related to real estate. It mainly focuses on acquiring equities of real-estate related companies irrespective of their market capitalizations. It may invest a significant portion of its assets in a particular country or region. The non-diversified real-estate mutual fund returned 15% over the last one year period.
The fund has an expense ratio of 1.22% as compared to category average of 1.43%.
Goldman Sachs Real Estate A (GREAX) invests a major portion of its assets in companies which are involved in the real estate sector. It may also invest a maximum of 20% of its assets in fixed income instruments including government and corporate debt securities. The non-diversified real-estate mutual fund returned 18.5% over the last one year period.
Nora Creedon is the fund manager and has managed this real estate mutual fund since 2010.
AMG Managers Real Estate Securities (MRESX) seeks capital growth over the long run with high income. It invests a lion’s share of its assets in real estate companies which may also include REITs. It generally has a holding of around 40 to 60 stocks. The non-diversified real-estate mutual fund returned 12.9% over the last one year period.
As of July 2014, this fund held 58 issues with 7.33% of its assets invested in Simon Property Group Inc.
ProFunds Real Estate UltraSector Service (REPSX) invests in securities that are believed to have a daily return of 150% of the return of the Dow Jones U.S. Real Estate Index. The index is a measure of the U.S. real estate sector’s equities. The non-diversified real-estate mutual fund returned 24.2% over the last one year period.
The fund has an expense ratio of 2.76% as compared to category average of 2.03%.
Fidelity Series Real Estate Equity (FREDX) invests a lion’s share of its assets in firms whose primary operations are related to the real estate sector. It invests in both U.S. and non U.S. companies depending on factors such as financial strength and economic condition. The non-diversified real-estate mutual fund returned 18% over the last one year period.
Samuel J. Wald is the fund manager and has managed this real estate mutual fund since 2011.
To view the Zacks Rank and past performance of all real estate mutual funds, investors can click here to see the complete list of funds.
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 in our Mutual Fund Center.
Read the analyst report on MGLAX
Read the analyst report on GREAX
Read the analyst report on MRESX
Read the analyst report on REPSX
Read the analyst report on FREDX
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