For investors looking to park their money in the real estate sector, mutual funds are the cheapest and most convenient. This category of funds also offers solid protection against inflation. The real estate sector has recently seen tough times but the presence of this investment vehicle generally adds stability to a portfolio. This is because volatility in property prices is far less compared to the extent experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while significantly reducing the associated risk.
Below we share with you three top-ranked real estate mutual funds. Each has earned 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 complete list of funds.
Davis Real Estate Fund Class A RPFRX aims for total return through a combination of income and growth. The fund’s adviser applies the Davis Investment Discipline to invest the majority of the fund’s assets in securities issued by companies operating in the real estate industry. The fund mostly invests in common stocks of U.S.-based companies and even in non-U.S. companies. RPFRX has three-year annualized returns of 7.5%.
Andrew Adams Davis is one of the fund managers of RPFRX since 1994.
Lord Abbett Developing Growth Fund Class A LAGWX aims for capital appreciation by investing in an actively managed and diversified portfolio that comprises developing growth companies. In order to achieve its investment objective, the fund invests mostly in equity securities of companies the portfolio management team thinks demonstrate above-average, long-term growth potential. LAGWX has three-year annualized returns of 22.5%.
LAGWX carries an expense ratio of 0.93% compared with the category average of 1.21%.
Prudential (LON:PRU) Global Real Estate A PURAX seeks income and capital growth. The fund invests heavily in equity securities of real estate companies as well as real estate investment trusts (REITs) and other real estate securities. Prudential Global Real Estate A has three-year annualized returns of 5.9%.
As of April 2019, PURAX held 88 issues, with 4.23% of its assets invested in Welltower Inc.
To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
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Zacks Investment Research