Investing in the real estate sector adds stability to a portfolio, mainly because volatility in property prices is far less than what is experienced by stocks. So, investors willing to hold long-term positions would do well to consider real estate mutual funds as they add stability and bring steady returns to a portfolio. This category of funds also offers superior protection against inflation and is a solid investment choice.
Below we share with you four best-rated real estate mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy)or #2 (Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
DFA Global Real Estate Securities Portfolio (DFGEX - Free Report) fund aims for long-term capital appreciation. The fund seeks to gain exposure to a wide portfolio of securities of U.S. and foreign companies in the real estate industry. The fund invests with a focus on real estate investment trusts or companies that the advisor evaluates as REIT-like. The fund may pursue its objective by investing in DFA Real Estate Securities Portfolio, DFA International Real Estate Securities Portfolio and in securities of companies operating in the real estate industry. DFGEX has three-year annualized returns of 3.9%.
As of June 2019, DFGEX held 167 issues, with 4.2% of its assets invested in American Tower Corp.
TIAA-CREF Real Estate Securities Retirement (TRRSX - Free Report) fund 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 three-year annualized returns of 9.4%.
David Copp is one of the fund managers of TRRSX since 2005.
Fidelity Real Estate Income Fund (FRIFX - Free Report) seeks higher-than-average income as well as appreciation of capital. The fund invests the lion’s share of its assets in real estate companies as well as other real estate related investments. The fund also invests in preferred and common stocks of real estate investment trusts, debt securities of real estate entities as well as commercial and other mortgage-backed securities. Fidelity Real Estate Income Fund has three-year annualized returns of 6.1%.
FSREX carries an expense ratio of 0.75% compared with the category average of 1.21%.
To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
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 >>