Top 5 Real Estate Mutual Funds - Best of Funds

For investors looking to park their funds in the real estate sector, mutual funds are the most cheapest and convenient method. This category of funds also offers superior protection against inflation. The real estate sector has seen tough times recently but the presence of these investments generally adds stability to a portfolio. This is because the volatility in property prices is far less compared to the kind experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while reducing the associated risk significantly.

Below we will share with you 5 top rated real estate mutual funds. Each has earned a Zacks #1 Rank (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, then click here.

Fidelity Real Estate Investment (FRESX) seeks capital appreciation and current income. The majority of the fund's assets are invested in real estate companies or other investments related to the sector. The real-estate mutual fund returned 24.67% in the last one year period

The real estate mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.90% compared to a category average of 1.45%.

Neuberger Berman Real Estate (NBRFX) primarily invests in equity securities issued by real estate investment trusts. It also invests in common stocks and other securities issued by companies from the real estate industry. The real estate mutual fund has a three year annualized return of 9.27%.

As of June 2011, this real-estate mutual fund held 43 issues, with 8.09% of its total assets invested in Simon Property Group, Inc.

Goldman Sachs US Real Estate A (GREAX) seeks capital appreciation and dividend income. The fund utilizes a large proportion of its assets to purchase equity securities of companies from the real estate sector or those with linkages to the industry. The real-estate mutual fund returned 22.77% over the last one year period.

James Otness is the Fund Manager and he has been managing this real estate mutual fund since 2009.

Nuveen Real Estate Securities A (FREAX) invests in publicly traded companies from the real estate sector. The fund focuses on acquiring income-generating common stock of real estate companies. Not more than 25% of its assets may be used to purchase foreign stocks. The real estate mutual fund has a ten year annualized return of 12.99%.

The real estate mutual fund has a minimum initial investment of $3,000 and an expense ratio of 1.24% compared to a category average of 1.45%.

JPMorgan US Real Estate A (SUSIX) seeks capital appreciation and current income. The fund invests the majority of its assets in domestic real estate companies whose securities are traded publicly. At least 25% of its assets are invested in companies with interests in the real estate sector. The real-estate mutual fund returned 22.55% over the last one year period.

Kenneth D. Statzis the Fund Manager and he has been managing this real estate mutual fund since 1997.

To view the Zacks Rank and past performance of all real estate mutual funds, then click here.

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. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.