Mutual funds focusing on the real estate sector should continue to be part of portfolios with a long term horizon even though the sector has gone through tough times in the recent past. This category of funds has delivered good returns in the past and offers a convenient method for investing in real estate. 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 over the long term.
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.
American Century Real Estate (REACX) invest heavily in equity securities of real estate investment trusts and companies from the real estate industry. It seeks total return through a mix of current income and capital growth. The real-estate fund returned 66.94% over the last one year period and has a ten year annualized return of 10.72%.
Steven R. Brown is the Fund Manager and he has been managing this real estate fund since 2008.
CGM Realty (CGMRX) seeks capital growth over the long term and current income. It primarily invests in companies in the real estate sector. Up to 20% of its assets may be used to purchase equity or debt securities issued by firms not belonging to the real estate sector. A similar percentage may be invested in junk bonds.
The fund has a five year annualized return of 12.94%. As of December 2009, this real estate fund held 21 issues, with 7.51% of its total assets invested in Digital Realty Trust, Inc.
RiverSource Real Estate A (ARLAX) 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 which have investments in the industry. The real-estate fund returned 67.48% over the last one year period.
The real-estate fund has an expense ratio of 1.43% compared to a category average of 1.52%.
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 fund has a ten year annualized return of 10.72%.
James B. Otness is the fund manager and has managed this real estate fund since 2009.
Neuberger Berman Real Estate (NBRFX) primarily invests in equity securities issued by real estate investment trusts. It also invests in common stocks and other securities issued by companies from the real estate industry. The fund returned 72.59% over the last one year period.
The real estate fund has a minimum initial investment of $1,000 and an expense ratio of 0.99% compared to a category average of 1.52%.
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