For investors looking to park their money in the real estate sector, mutual funds are the cheapest and most-convenient options. This category of funds also offers solid protection against inflation.
The real estate sector recently saw 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.
Cohen & Steers Real Estate Securities Fund, Inc. Class A CSEIX invests the majority of its assets in common stocks and other equity securities issued by real estate companies. The non-diversified fund aims for total return. CSEIX has three-year annualized returns of 10.5%.
As of December 2019, CSEIX held 52 issues, with 8.64% of its assets invested in American Tower Corp.
DWS RREEF Real Estate Securities Fund - Class A RRRAX seeks long-term capital growth and current income. The fund invests the majority of its assets in equity securities of real estate investment trusts and real estate companies. RRRAX has three-year annualized returns of 9.8%.
John W. Vojticek is one of the fund managers of RRRAX since 2004.
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 its 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 9%.
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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