For investors looking to park their money in the real estate industry, mutual funds are the cheapest and most convenient options. This category of funds offers strong protection against inflation.
The real estate industry has been going through rough times recently, but the presence of this investment vehicle usually adds stability to a portfolio. This is because the volatility of real estate prices is much lower than that of stocks. Adding such funds to a broadly diversified portfolio would increase returns while significantly reducing associated risk.
Below, we share with you three top-ranked real estate mutual funds. Everyone has won a Zacks Mutual Fund Rank # 1 (strong buy) and is expected to outperform its peers in the future. Investors can click here to see the full list of funds.
Fidelity Real Estate Income Fund FRIFX aims for above average income, while capital growth is a secondary objective. The fund invests the majority of its assets in preferred and common shares of REITs; debt securities of real estate entities; and commercial and other mortgage-backed securities. FRIFX has three-year annualized returns of 9.3%.
Mark P. Snyderman has been one of FRIFX’s fund managers since 2003.
Manning & Napier Real Estate Series S Class MNREX aims for high current income and long-term capital growth by investing primarily in companies in the real estate industry. The fund invests at least 80% of its assets in securities of companies mainly active in the real estate sector. The MNREX shows three-year annualized returns of 11.2%.
At the end of April 2021, MNREX held 49 issues, with 9.24% of its assets invested in Equinix Inc.
Fidelity Real Estate Investment Portfolio The FRESX fund aims for above-average income and long-term capital growth, which is compatible 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, mainly engaged in the real estate sector and other investments related to real estate. FRESX has three-year annualized returns of 11.1%.
FRESX has an expense ratio of 0.74% compared to the category average of 1.11%.
To view the Zacks rank and past performance of all real estate funds, investors can click here to see the full list of funds.
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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.