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 three best-rated 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.
DFA Global Real Estate Securities Portfolio DFGEX 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 7.3%.
As of August 2019, DFGEX held 167 issues, with 4.51% of its assets invested in American Tower Corp (NYSE:AMT).
TIAA-CREF Real Estate Securities Retirement TRRSX 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 10.3%.
David Copp is one of the fund managers of TRRSX since 2005.
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 8.3%.
RPFRX carries an expense ratio of 0.97% compared with the category average of 1.22%.
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