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5 Real Estate Funds to Buy on Knockout Housing Data
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The housing industry put up a stellar show in October. Sales of existing homes sales rose at its best pace since June, and home building in the United States skyrocketed to a 12-month high. The feat was achieved after the effect of the two devastating hurricanes ebbed. Most of the gains came from the South and the Midwest. Building permits increased 5.9% to 1.3 million units in October. Moreover, housing starts jumped 13.7% to 1.3 million units last month — the highest level since Oct 2016. The consensus estimate for the period was 1.2 million units.
Housing starts rallied 17.2% in the South, reaching 621,000 units in October. Additionally, single-family construction soared 16.6%. This marked its highest level since 2007. Further, Midwest and Northeast reported a surge in residential construction. Also, single-family home-building, which constitutes the largest portion of the housing market, increased 5.3% to reach 877,000 units. An increase in housing starts marks the end of a streak of decline for three straight months.
The index of home builder sentiment rose two points in November to 70 from the previous month. This followed a four-point rise in October. The index had dipped three points in September from August. However, the index remains at a strong level of 64 points as any reading above 50 is considered positive.
Of the index's three components, current sales conditions rose two points to 77. Buyer traffic increased two points to 50. This is the first time in six months that this component is in the positive territory. However, sales prediction over the next six months has dropped one point to 77.
Top 5 Real Estate Funds To Buy Now
There are ample reasons to be optimistic about the broader housing sector. Moreover, the hurricane season is almost over. Therefore, adding some real estate funds to your portfolio would be prudent at this point.
The question that arises now is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without 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).
Here, we have highlighted five real estate mutual funds flaunting a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging one-year and YTD returns. Additionally, the minimum initial investment is within $5000 and net assets are above $50 million.
Fidelity Advisor International Real Estate Fund Class I (FIRIX - Free Report) seeks to invest primarily in foreign securities. The fund invests a bulk of its assets in securities of companies involved in the real estate industry as well as real estate-related investments. It allocates investments across the globe in different countries and regions.
FIRIX has an annual expense ratio of 0.95%, which is below the category average of 1.34%. The fund has one-year and YTD returns of 23.1% and 21.4%, respectively.
TIAA-CREF Real Estate Securities Retirement (TRRSX - Free Report) seeks maximum total returns over the long run through growth of capital and current income. TRRSX invests a large chunk of its assets in companies primarily involved in operations related to the real estate domain. The fund may invest a maximum of 15% of its assets in securities issued by foreign entities.
TRRSX has an annual expense ratio of 0.75%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 18.8% and 12.9%, respectively.
Fidelity Real Estate Investment Portfolio Fund (FRESX - Free Report) seeks above-average income and long-term capital growth consistent with reasonable investment risk. FRESX seeks to provide a yield that exceeds the composite yield of the Standard and Poor's 500 Index. FRESX normally invests at least 80% of the fund's total assets in equity securities of companies principally engaged in the real estate industry and other real estate-related investments.
FRESX has an annual expense ratio of 0.76%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 13.2% and 5.5%, respectively.
Principal Real Estate Securities R5 (PREPX - Free Report) seeks growth of total returns. PREPX invests the lion’s share of its assets in equity securities of real estate companies. The fund focuses on value equity securities.
PREPX has an annual expense ratio of 1.08%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 16.4% and 9.2%, respectively.
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5 Real Estate Funds to Buy on Knockout Housing Data
The housing industry put up a stellar show in October. Sales of existing homes sales rose at its best pace since June, and home building in the United States skyrocketed to a 12-month high. The feat was achieved after the effect of the two devastating hurricanes ebbed. Most of the gains came from the South and the Midwest. Building permits increased 5.9% to 1.3 million units in October. Moreover, housing starts jumped 13.7% to 1.3 million units last month — the highest level since Oct 2016. The consensus estimate for the period was 1.2 million units.
Housing starts rallied 17.2% in the South, reaching 621,000 units in October. Additionally, single-family construction soared 16.6%. This marked its highest level since 2007. Further, Midwest and Northeast reported a surge in residential construction. Also, single-family home-building, which constitutes the largest portion of the housing market, increased 5.3% to reach 877,000 units. An increase in housing starts marks the end of a streak of decline for three straight months.
The index of home builder sentiment rose two points in November to 70 from the previous month. This followed a four-point rise in October. The index had dipped three points in September from August. However, the index remains at a strong level of 64 points as any reading above 50 is considered positive.
Of the index's three components, current sales conditions rose two points to 77. Buyer traffic increased two points to 50. This is the first time in six months that this component is in the positive territory. However, sales prediction over the next six months has dropped one point to 77.
Top 5 Real Estate Funds To Buy Now
There are ample reasons to be optimistic about the broader housing sector. Moreover, the hurricane season is almost over. Therefore, adding some real estate funds to your portfolio would be prudent at this point.
The question that arises now is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without 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).
Here, we have highlighted five real estate mutual funds flaunting a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging one-year and YTD returns. Additionally, the minimum initial investment is within $5000 and net assets are above $50 million.
Fidelity Advisor International Real Estate Fund Class I (FIRIX - Free Report) seeks to invest primarily in foreign securities. The fund invests a bulk of its assets in securities of companies involved in the real estate industry as well as real estate-related investments. It allocates investments across the globe in different countries and regions.
FIRIX has an annual expense ratio of 0.95%, which is below the category average of 1.34%. The fund has one-year and YTD returns of 23.1% and 21.4%, respectively.
TIAA-CREF Real Estate Securities Retirement (TRRSX - Free Report) seeks maximum total returns over the long run through growth of capital and current income. TRRSX invests a large chunk of its assets in companies primarily involved in operations related to the real estate domain. The fund may invest a maximum of 15% of its assets in securities issued by foreign entities.
TRRSX has an annual expense ratio of 0.75%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 18.8% and 12.9%, respectively.
Fidelity Real Estate Investment Portfolio Fund (FRESX - Free Report) seeks above-average income and long-term capital growth consistent with reasonable investment risk. FRESX seeks to provide a yield that exceeds the composite yield of the Standard and Poor's 500 Index. FRESX normally invests at least 80% of the fund's total assets in equity securities of companies principally engaged in the real estate industry and other real estate-related investments.
FRESX has an annual expense ratio of 0.76%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 13.2% and 5.5%, respectively.
Principal Real Estate Securities R5 (PREPX - Free Report) seeks growth of total returns. PREPX invests the lion’s share of its assets in equity securities of real estate companies. The fund focuses on value equity securities.
PREPX has an annual expense ratio of 1.08%, which is below the category average of 1.22%. The fund has one-year and YTD returns of 16.4% and 9.2%, respectively.
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 >>