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3 Real Estate Funds to Buy on Surging Building Permit
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According to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, the number of building permits in October reached a revised rate of 1,487,000 units. This represents a 1.1% increase from September’s figure of 1,471,000 permits. In addition, housing starts for October totaled 1,372,000 units, showing a 1.9% increase from September’s count of 1,346,000.
The rise in building permits and housing starts can be attributed to factors that are influencing market trends. First, there is a shortage of homes, which has created a need for increased construction to meet the growing demand. Additionally, low mortgage rates at around 7.5% have sparked interest in homeownership, creating a favorable environment for builders to undertake new projects contributing to the overall expansion in the real estate sector.
Given these market trends, real estate mutual funds are becoming an attractive investment option. These funds offer diversified exposure to various real estate sectors, such as residential, commercial and industrial properties. Managed by professionals in the field, real estate mutual funds provide opportunities for investors to participate in the market’s growth while offering liquidity and potentially reducing volatility.
Investing in real estate mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and trim transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three real estate mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and expense ratios considerably lower than the category average. So, these funds have provided comparatively strong performance along with lower fees.
T. Rowe Price Real Estate Fund (TRREX - Free Report) aims to provide long-term growth through a combination of capital appreciation and current income. It generally invests in equity securities of real estate companies and in foreign securities.
Nina P. Jones has been the lead manager of TRREX since Dec 31, 2018. Most of the fund’s holdings were in companies like Prologis, Inc. (7.6%), American Tower Corporation (7.5%) and Equinix, Inc. (6.8%) as of Jun 30, 2023.
TRREX’s 3-year and 5-year annualized returns are 5.8% and 1%, respectively. Its net expense ratio is 0.86% compared with the category average of 1.08%. TRREX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS RREEF Real Estate Securities Fund (RRRAX - Free Report) fund invests most of its assets in equity securities of companies that are primarily involved in real estate companies. RRRAX advisors also invest in short-term securities, bonds and notes.
John W. Vojticek has been the lead manager of RRRAX since Sep 30, 2004. Most of the fund’s holdings were in companies like Prologis, Inc. (9.3%), American Tower Corp (8.7%) and Equinix, Inc. (8%) as of Jun 30, 2023.
RRRAX’s 3-year and 5-year annualized returns are 2.9% and 2.7%, respectively. Its net expense ratio is 1% compared with the category average of 1.08%. RRRAX has a Zacks Mutual Fund Rank #1.
Fidelity Real Estate Income Fund (FRIFX - Free Report) invests its assets in preferred and common stocks of real estate investment trusts. FRIFX advisors also invest in securities of companies principally engaged in the real estate industry and other real estate-related investments.
William Maclay has been the lead manager of FRIFX since Feb 28, 2019. Most of the fund’s holdings were in companies like Equity LifeStyle Properties, Inc. (2.2%), American Tower Corporation (2.2%) and Prologis Inc (2%) as of Jul 31, 2023.
FRIFX’s 3-year and 5-year returns are 3.3% and 2.8%, respectively. The annual expense ratio is 0.72% compared with the category average of 1.08%. FRIFX has a Zacks Mutual Fund Rank #1.
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3 Real Estate Funds to Buy on Surging Building Permit
According to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, the number of building permits in October reached a revised rate of 1,487,000 units. This represents a 1.1% increase from September’s figure of 1,471,000 permits. In addition, housing starts for October totaled 1,372,000 units, showing a 1.9% increase from September’s count of 1,346,000.
The rise in building permits and housing starts can be attributed to factors that are influencing market trends. First, there is a shortage of homes, which has created a need for increased construction to meet the growing demand. Additionally, low mortgage rates at around 7.5% have sparked interest in homeownership, creating a favorable environment for builders to undertake new projects contributing to the overall expansion in the real estate sector.
Given these market trends, real estate mutual funds are becoming an attractive investment option. These funds offer diversified exposure to various real estate sectors, such as residential, commercial and industrial properties. Managed by professionals in the field, real estate mutual funds provide opportunities for investors to participate in the market’s growth while offering liquidity and potentially reducing volatility.
Investing in real estate mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and trim transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three real estate mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and expense ratios considerably lower than the category average. So, these funds have provided comparatively strong performance along with lower fees.
T. Rowe Price Real Estate Fund (TRREX - Free Report) aims to provide long-term growth through a combination of capital appreciation and current income. It generally invests in equity securities of real estate companies and in foreign securities.
Nina P. Jones has been the lead manager of TRREX since Dec 31, 2018. Most of the fund’s holdings were in companies like Prologis, Inc. (7.6%), American Tower Corporation (7.5%) and Equinix, Inc. (6.8%) as of Jun 30, 2023.
TRREX’s 3-year and 5-year annualized returns are 5.8% and 1%, respectively. Its net expense ratio is 0.86% compared with the category average of 1.08%. TRREX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS RREEF Real Estate Securities Fund (RRRAX - Free Report) fund invests most of its assets in equity securities of companies that are primarily involved in real estate companies. RRRAX advisors also invest in short-term securities, bonds and notes.
John W. Vojticek has been the lead manager of RRRAX since Sep 30, 2004. Most of the fund’s holdings were in companies like Prologis, Inc. (9.3%), American Tower Corp (8.7%) and Equinix, Inc. (8%) as of Jun 30, 2023.
RRRAX’s 3-year and 5-year annualized returns are 2.9% and 2.7%, respectively. Its net expense ratio is 1% compared with the category average of 1.08%. RRRAX has a Zacks Mutual Fund Rank #1.
Fidelity Real Estate Income Fund (FRIFX - Free Report) invests its assets in preferred and common stocks of real estate investment trusts. FRIFX advisors also invest in securities of companies principally engaged in the real estate industry and other real estate-related investments.
William Maclay has been the lead manager of FRIFX since Feb 28, 2019. Most of the fund’s holdings were in companies like Equity LifeStyle Properties, Inc. (2.2%), American Tower Corporation (2.2%) and Prologis Inc (2%) as of Jul 31, 2023.
FRIFX’s 3-year and 5-year returns are 3.3% and 2.8%, respectively. The annual expense ratio is 0.72% compared with the category average of 1.08%. FRIFX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>