For investors looking to park their funds in the real estate sector, mutual funds are the most cheapest and convenient method. This category of funds also offers superior protection against inflation. The real estate sector has seen tough times recently but the presence of these investments generally adds stability to a portfolio. This is because the volatility in property prices is far less compared to the kind experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while reducing the associated risk significantly.

Below we will share with you the 5 best performing real estate mutual funds year to date. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.

Forward International Real Estate A ( KIRAX - MF report ) invests the majority of its assets in foreign equity securities issued by companies from the real estate sector and those engaged in related activities. The fund may purchase emerging market securities and purchase ADRs. The real-estate mutual fund has a three year annualized return of 27.95%.

Ian S. Goltra is the Fund Manager and he has been managing this real estate mutual fund since 2010.

Commonwealth Real Estate Securities ( CNREX - MF report ) seeks current income and capital growth over the long term. A large share of the fund’s assets are invested in both equity and debt securities issued by real estate companies. It invests in companies of all sizes and also in ADRs. The real-estate mutual fund has a three year annualized return of 24.52%.

The real estate mutual fund has a minimum initial investment of $200 and an expense ratio of 3.29% compared to a category average of 1.39%.

ING Global Real Estate A ( IGLAX - MF report ) primarily invests in equity securities issued by companies from the real estate sector. The fund may invest in emerging market securities and also in exchange traded funds. The real-estate mutual fund has a three year annualized return of 30.2%.

As of December 2011, this real-estate mutual fund held 97 issues, with 5.88% of its total assets invested in Simon Property Group, Inc.

Principal Global Real Estate Securities A ( POSAX - MF report ) 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 has a three year annualized return of 32.27%.

Simon D. Hedger is the Fund Manager and he has been managing this real estate mutual fund since 2007.

Forward Real Estate Long/Short A ( KSRAX - MF report ) invests the majority of its assets in real estate securities. These may be issued by real estate investment trusts or companies operating in the sector. The real-estate mutual fund has a three year annualized return of 44.18%.

The real estate mutual fund has a minimum initial investment of $4,000 and an expense ratio of 1.67% compared to a category average of 1.39%.

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 at http://www.zacks.com/funds.