Concerns over Omicron and rising prices had slowed down spending on construction projects during the last months of 2021. But things seem to be bouncing back. Spending once again gathered pace in January. The jump comes despite soaring prices and shows that the economy is on track for a smooth recovery.
The spending was once again driven by a strong outlay on single-family homes, which has been the case for the past several months as demand for housing continues to soar. Thus, funds like JHancock Real Estate Securities Fund Class 1 (JIREX - Free Report) , MFS Global Real Estate Fund Class I (MGLIX - Free Report) and Neuberger Berman Real Estate Fund Class R6 (NRREX - Free Report) are likely to benefit in the near term.
Construction Spending Soars
The Commerce Department reported on Mar 1 that construction spending increased 1.3% in January to $1,677.2 billion on a seasonally adjusted annual rate. This beat analysts’ expectations of a 0.2% increase. Construction spending rose 8.2% year over year in January. This follows a revision in December figures of a rise of 0.8% from the initially reported 0.2% increase.
Spending has been majorly driven by investments on private construction projects over the past year. This wasn’t any different in January, with spending rising 1.5%. Spending on construction grew 1.3%. Homebuilding, which has been driving the construction sector for a while now, once again outperformed all other industries. Construction spending on single-family homes jumped 1.2%.
The homebuilding market has been thriving ever since the economy started reopening. Demand for single homes has traditionally been high compared to supply and it further soared following the coronavirus-induced lockdown. Moreover, worries of rising interest rates made buyers rush to buy homes.
This also led to a jump in home sales in January. Existing house sales increased 6.7% in January to a seasonally adjusted annual rate of 6.5 million units, according to the National Association of Realtors (NAR). This came in contrast to analysts' estimates of a 1% decline.
The Federal Reserve has stated that it will raise interest rates many times this year. As a result, people have been rushing to acquire homes before the price spikes take effect.
As a result, we've chosen three such funds from the real estate sector that are worth buying. Moreover, these funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Our Picks
JHancock Real Estate Securities Fund Class 1 seeks appreciation of capital and current income over the long term. JIREX invests primarily in the equity securities of companies engaged in operations related to the real estate sector, which includes REITs. JHancock Real Estate Securities Fund Class 1 invests in securities like common stocks, preferred stocks and convertible securities.
JHancock Real Estate Securities Fund Class 1 has a 3-year and 5-year annualized return of 14% and 11.1%, respectively. The annual expense ratio of 0.82% is lower than the category average of 1.08%. JIREX 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.
MFS Global Real Estate Fund Class I primarily invests the majority of its net assets in real estate-related investments in both the United States and abroad. MGLIX generally invests the majority of the fund's assets in equity securities. MFS Global Real Estate Fund Class Imay invest any amount of its assets in real estate-related investments.
MFS Global Real Estate Fund Class I has a 3-year and 5-year annualized return of 11.9% and 10.8%, respectively. The annual expense ratio of 0.98% is lower than the category average of 1.21%. MGLIX 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.
Neuberger Berman Real Estate Fund Class R6 aims for total return. Additionally, the fund gives importance to capital appreciation and current income. The majority of NRREX’s assets are invested in equity securities of real estate investment trusts and real estate companies.
Neuberger Berman Real Estate Fund Class R6 has returned 15.6% and 12.4% over the past three and five years, respectively. The annual expense ratio of 0.76% is lower than the category average of 1.08%. NRREX 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.
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 >>
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Concerns over Omicron and rising prices had slowed down spending on construction projects during the last months of 2021. But things seem to be bouncing back. Spending once again gathered pace in January. The jump comes despite soaring prices and shows that the economy is on track for a smooth recovery.
The spending was once again driven by a strong outlay on single-family homes, which has been the case for the past several months as demand for housing continues to soar. Thus, funds like JHancock Real Estate Securities Fund Class 1 (JIREX - Free Report) , MFS Global Real Estate Fund Class I (MGLIX - Free Report) and Neuberger Berman Real Estate Fund Class R6 (NRREX - Free Report) are likely to benefit in the near term.
Construction Spending Soars
The Commerce Department reported on Mar 1 that construction spending increased 1.3% in January to $1,677.2 billion on a seasonally adjusted annual rate. This beat analysts’ expectations of a 0.2% increase. Construction spending rose 8.2% year over year in January. This follows a revision in December figures of a rise of 0.8% from the initially reported 0.2% increase.
Spending has been majorly driven by investments on private construction projects over the past year. This wasn’t any different in January, with spending rising 1.5%. Spending on construction grew 1.3%. Homebuilding, which has been driving the construction sector for a while now, once again outperformed all other industries. Construction spending on single-family homes jumped 1.2%.
The homebuilding market has been thriving ever since the economy started reopening. Demand for single homes has traditionally been high compared to supply and it further soared following the coronavirus-induced lockdown. Moreover, worries of rising interest rates made buyers rush to buy homes.
This also led to a jump in home sales in January. Existing house sales increased 6.7% in January to a seasonally adjusted annual rate of 6.5 million units, according to the National Association of Realtors (NAR). This came in contrast to analysts' estimates of a 1% decline.
The Federal Reserve has stated that it will raise interest rates many times this year. As a result, people have been rushing to acquire homes before the price spikes take effect.
As a result, we've chosen three such funds from the real estate sector that are worth buying. Moreover, these funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Our Picks
JHancock Real Estate Securities Fund Class 1 seeks appreciation of capital and current income over the long term. JIREX invests primarily in the equity securities of companies engaged in operations related to the real estate sector, which includes REITs. JHancock Real Estate Securities Fund Class 1 invests in securities like common stocks, preferred stocks and convertible securities.
JHancock Real Estate Securities Fund Class 1 has a 3-year and 5-year annualized return of 14% and 11.1%, respectively. The annual expense ratio of 0.82% is lower than the category average of 1.08%. JIREX 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.
MFS Global Real Estate Fund Class I primarily invests the majority of its net assets in real estate-related investments in both the United States and abroad. MGLIX generally invests the majority of the fund's assets in equity securities. MFS Global Real Estate Fund Class Imay invest any amount of its assets in real estate-related investments.
MFS Global Real Estate Fund Class I has a 3-year and 5-year annualized return of 11.9% and 10.8%, respectively. The annual expense ratio of 0.98% is lower than the category average of 1.21%. MGLIX 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.
Neuberger Berman Real Estate Fund Class R6 aims for total return. Additionally, the fund gives importance to capital appreciation and current income. The majority of NRREX’s assets are invested in equity securities of real estate investment trusts and real estate companies.
Neuberger Berman Real Estate Fund Class R6 has returned 15.6% and 12.4% over the past three and five years, respectively. The annual expense ratio of 0.76% is lower than the category average of 1.08%. NRREX 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.
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 >>
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Get the latest research report on JIREX - FREE
Get the latest research report on MGLIX - FREE
Get the latest research report on NRREX - FREE