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4 Funds to Buy as US Housing Starts Jump in November
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On Dec 17, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that authorization of building permits for privately-owned housing units increased 6.2% in November, reaching a seasonally-adjusted annual rate of 1.639 million. The figure tops the consensus estimate of 1.568 million and October’s revised figure of 1.544 million. With the coronavirus pandemic still lingering, people continue to migrate to the lower populated suburbs. Single-family authorizations increased 1.3% in November at a rate of 1.143 million, much above the revised October figure of 1.128 million.
Additionally, the same report showed that new residential construction in America unexpectedly increased in November. Privately-owned housing starts were at a seasonally adjusted annual rate of 1.547 million for the reported month. November’s figure is a 1.2% increase from October’s revised rate of 1.528 million. The reported figure also beat the consensus estimate of 1.531 million. Single-family housing starts were at a rate of 1.186 in November, highlighting a 0.4% increase from the revised October figure of 1.181 million.
Constant rise in coronavirus cases is no doubt hindering plans of reopening the broader economy. However, such rise in infection cases has somehow been a blessing in disguise for the U.S. housing market. The current remote working trend and migration from cities to lower populated suburbs have driven demand for new houses, especially single-family home. And the record-low mortgage rates have just been an added bonus to these homebuyers.
For the week ending Dec 17, mortgage company Freddie Mac reported that the 30-year fixed mortgage rate sunk to a new record low, averaging 2.67%. The 30-year fixed mortgage has now hit a record low for the 15th time this year. As plans of an economic rebound still relies on the course of the deadly virus, the Federal Reserve has signaled at plans of keeping rates unchanged or near zero till 2024, which in turn may drag mortgage rates lower.
4 Top Real Estate Fund Choices
Given the positive data from the housing space, we have shortlisted four real estate mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to grow. Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Real Estate Investment Portfolio (FRESX - Free Report) fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies principally engaged in the real estate industry and other real estate-related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 0.9% and 2.9% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRESX has an annual expense ratio of 0.74% versus the category average of 1.19%.
MFS Global Real Estate Fund Class R6 (MGLRX - Free Report) looks for total returns. The fund invests majority of assets in U.S. equity securities and foreign real estate-related investments of any size.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 4.9% and 5.9% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MGLRX has an annual expense ratio of 0.90%, which is below the category average of 1.24%.
Fidelity Advisor Real Estate Income Fund Class A (FRINX - Free Report) aims for higher-than-average income. As a secondary objective, the fund seeks capital growth. FRINX invests majority of assets in common stocks of REITs as well as securities of companies principally engaged in the real estate industry and other real estate related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 1.7% and 4.3% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRINX has an annual expense ratio of 1.01% versus the category average of 1.19%.
Neuberger Berman Real Estate Fund Class R6 (NRREX - Free Report) aims for total return and also gives importance to capital appreciation and current income. Majority of this non-diversified fund’s assets are invested in equity securities of real estate investment trusts and real estate companies.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 6.5% and 7.5% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
NRREX has an annual expense ratio of 0.76%, below the category average of 1.19%.
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4 Funds to Buy as US Housing Starts Jump in November
On Dec 17, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that authorization of building permits for privately-owned housing units increased 6.2% in November, reaching a seasonally-adjusted annual rate of 1.639 million. The figure tops the consensus estimate of 1.568 million and October’s revised figure of 1.544 million. With the coronavirus pandemic still lingering, people continue to migrate to the lower populated suburbs. Single-family authorizations increased 1.3% in November at a rate of 1.143 million, much above the revised October figure of 1.128 million.
Additionally, the same report showed that new residential construction in America unexpectedly increased in November. Privately-owned housing starts were at a seasonally adjusted annual rate of 1.547 million for the reported month. November’s figure is a 1.2% increase from October’s revised rate of 1.528 million. The reported figure also beat the consensus estimate of 1.531 million. Single-family housing starts were at a rate of 1.186 in November, highlighting a 0.4% increase from the revised October figure of 1.181 million.
Constant rise in coronavirus cases is no doubt hindering plans of reopening the broader economy. However, such rise in infection cases has somehow been a blessing in disguise for the U.S. housing market. The current remote working trend and migration from cities to lower populated suburbs have driven demand for new houses, especially single-family home. And the record-low mortgage rates have just been an added bonus to these homebuyers.
For the week ending Dec 17, mortgage company Freddie Mac reported that the 30-year fixed mortgage rate sunk to a new record low, averaging 2.67%. The 30-year fixed mortgage has now hit a record low for the 15th time this year. As plans of an economic rebound still relies on the course of the deadly virus, the Federal Reserve has signaled at plans of keeping rates unchanged or near zero till 2024, which in turn may drag mortgage rates lower.
4 Top Real Estate Fund Choices
Given the positive data from the housing space, we have shortlisted four real estate mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to grow. Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Real Estate Investment Portfolio (FRESX - Free Report) fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies principally engaged in the real estate industry and other real estate-related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 0.9% and 2.9% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRESX has an annual expense ratio of 0.74% versus the category average of 1.19%.
MFS Global Real Estate Fund Class R6 (MGLRX - Free Report) looks for total returns. The fund invests majority of assets in U.S. equity securities and foreign real estate-related investments of any size.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 4.9% and 5.9% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MGLRX has an annual expense ratio of 0.90%, which is below the category average of 1.24%.
Fidelity Advisor Real Estate Income Fund Class A (FRINX - Free Report) aims for higher-than-average income. As a secondary objective, the fund seeks capital growth. FRINX invests majority of assets in common stocks of REITs as well as securities of companies principally engaged in the real estate industry and other real estate related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 1.7% and 4.3% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRINX has an annual expense ratio of 1.01% versus the category average of 1.19%.
Neuberger Berman Real Estate Fund Class R6 (NRREX - Free Report) aims for total return and also gives importance to capital appreciation and current income. Majority of this non-diversified fund’s assets are invested in equity securities of real estate investment trusts and real estate companies.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 6.5% and 7.5% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
NRREX has an annual expense ratio of 0.76%, below the category average of 1.19%.
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 >>