Markets

5 Top-Rated Real Estate Mutual Funds to Add to Your Portfolio

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Securities from the real estate sector continue to be an integral part of any portfolio with a long-term horizon. Over the years, mutual funds from this category have continued to perform favorably. They are a convenient way to invest in real estate because of their low initial investment requirements and the advantage of professional management. Investors willing to hold long-term positions would do well to consider these funds as they add stability and bring steady returns to a portfolio.

Below we will share with you 5 best rated real estate mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds .

Fidelity Series Real Estate Equity ( FREDX ) invests the majority of its assets in companies associated with the real estate industry across the world. Factors including financial strength and economic condition are considered before investing in a company. FREDX is expected to provide a higher return than that of the S&P 500 Index. The Fidelity Series Real Estate Equity is a non-diversified fund and has a three-year annualized return of 8.6%.

Samuel Wald is the fund manager and has managed FREDX since 2011.

T. Rowe Price Global Real Estate ( TRGRX ) seeks long-term growth. TRGRX invests a major portion of its assets in equity securities of real estate firms all over the world. TRGRX is expected to invest in a minimum of five different countries while at least 40% of its assets are believed to be invested in securities of foreign real estate companies. The T. Rowe Price Global Real Estate is a non-diversified fund and has a three-year annualized return of 5.5%.

TRGRX has an expense ratio of 1.05% as compared to the category average of 1.40%.

PIMCO Real Estate Real Return Strategy A ( PETAX ) invests in real estate-linked derivatives and a basket of inflation-indexed securities to achieve its investment objective. PETAX also invests in Fixed Income Instruments including bonds and debt instruments issued by domestic or foreign public and private sector entities. PETAX may also invest a maximum of 30% of its assets in securities denominated in foreign currencies. PETAX may invest beyond this limit in securities of foreign issuers denominated in U.S. dollar. The PIMCO Real Estate Real Return Strategy A is a non-diversified fund and has a three-year annualized return of 5.5%.

As of June 2015, PETAX held 437 issues with 34.06% of its assets invested in US Treasury TIP.

CGM Realty ( CGMRX ) seeks high income and long-term capital appreciation. CGMRX invests a major portion of its assets in securities of real estate companies including REITs. CGMRX may invest a maximum of 20% of its assets in securities that are not related to the real estate domain, which also includes debt securities. CGMRX invests in companies located across the world irrespective of their market capitalizations. The CGM Realty fund has a three-year annualized return of 8.1%.

CGMRX has an expense ratio of 0.92% as compared to the category average of 1.33%.

Voya International Real Estate A ( IIRAX ) invests the majority of its assets in equity securities companies involved with the real estate industry. IIRAX invests a minimum of 65% of its assets in a number of countries other than the United States. IIRAX may also invest in convertible securities, initial public offerings and Rule 144A securities. The Voya International Real Estate A is a non-diversified fund and has a three-year annualized return of 4.6%.

As of June 2015, IIRAX held 77 issues with 5.09% of its assets invested in Mitsui Fudosan Co Ltd.

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. Pick the best mutual funds with the Zacks Rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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