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According to the U.S. Census Bureau’s report, in September 2023, there was an increase in construction spending. The data revealed that construction spending reached $1,996.5 billion after making adjustments, indicating a 0.4% rise from the revised estimate of $1,988.3 billion in August. The strong growth in the construction sector, showcasing its robustness, holds promising opportunities for real estate mutual funds.
The private construction industry played a role in driving this growth with spending reaching a rate of $1,555.9 billion in September after adjusting for seasonal variations and presenting a 0.4% increase from the revised August estimate of $1,549.6 billion. Real Estate mutual funds that invest in real estate assets such as residential and commercial properties are likely to experience significant benefits from this thriving private construction sector. Notably residential construction is flourishing well with a rate of $872.0 billion in September after adjusting for seasonal variations, marking a 0.6% increase compared to the revised estimate of $866.6 billion, in August. This presents an excellent opportunity for real estate mutual funds to capitalize on the strong demand for housing.
Investing in Real Estate mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and lower transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three Real Estate mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and expense ratios considerably lower than the category average. So, these funds have given a comparatively strong performance along with lower fees.
T. Rowe Price Real Estate Fund (TRREX - Free Report) aims to provide long-term growth through a combination of capital appreciation and current income. It generally invests in equity securities of real estate companies and in foreign securities.
Nina P. Jones has been the lead manager of TRREX since Dec 31, 2018. Most of the fund’s holdings were in companies like Prologis, Inc. (7.6%), American Tower Corporation (7.5%) and Equinix, Inc. (6.8%) as of Jun 30, 2023.
TRREX’s 3-year and 5-year annualized returns are 5.9% and 0.8%, respectively. Its net expense ratio is 0.86% compared with the category average of 1.08%. TRREX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
VY CBRE Global Real Estate Portfolio (IRGIX - Free Report) fund invests most of its assets in equity securities of companies that are primarily involved in the real estate industry. IRGIX advisors invest half of their assets in real estate activities and the other half in real estate.
Joseph P. Smith has been the lead manager of IRGIX since Feb 27, 2007. Most of the fund’s holdings were in companies like Equinix, Inc. (7.3%), Prologis, Inc (6.4%) and Simon Property Group, Inc (6.2%) as of Jun 30, 2023.
IRGIX’s 3-year and 5-year annualized returns are 2.9% and 1.5%, respectively. Its net expense ratio is 0.68% compared with the category average of 1.21%. IRGIX has a Zacks Mutual Fund Rank #1.
Fidelity Real Estate Income Fund (FRIFX - Free Report) invests its assets in preferred and common stocks of real estate investment trusts. FRIFX advisors also invest in securities of companies principally engaged in the real estate industry and other real estate-related investments.
William Maclay has been the lead manager of FRIFX since Feb 28, 2019. Most of the fund’s holdings were in companies like Equity LifeStyle Properties, Inc. (2.5%), American Tower Corporation (2.4%), and Prologis Inc (2%) as of Apr 30, 2023.
FRIFX’s 3-year and 5-year returns are 3.9% and 3.1%, respectively. The annual expense ratio is 0.72% compared with the category average of 1.08%. FRIFX has a Zacks Mutual Fund Rank #1.
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Buy 3 Real Estate Mutual Funds for Great Returns
According to the U.S. Census Bureau’s report, in September 2023, there was an increase in construction spending. The data revealed that construction spending reached $1,996.5 billion after making adjustments, indicating a 0.4% rise from the revised estimate of $1,988.3 billion in August. The strong growth in the construction sector, showcasing its robustness, holds promising opportunities for real estate mutual funds.
The private construction industry played a role in driving this growth with spending reaching a rate of $1,555.9 billion in September after adjusting for seasonal variations and presenting a 0.4% increase from the revised August estimate of $1,549.6 billion. Real Estate mutual funds that invest in real estate assets such as residential and commercial properties are likely to experience significant benefits from this thriving private construction sector. Notably residential construction is flourishing well with a rate of $872.0 billion in September after adjusting for seasonal variations, marking a 0.6% increase compared to the revised estimate of $866.6 billion, in August. This presents an excellent opportunity for real estate mutual funds to capitalize on the strong demand for housing.
Investing in Real Estate mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and lower transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three Real Estate mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and expense ratios considerably lower than the category average. So, these funds have given a comparatively strong performance along with lower fees.
T. Rowe Price Real Estate Fund (TRREX - Free Report) aims to provide long-term growth through a combination of capital appreciation and current income. It generally invests in equity securities of real estate companies and in foreign securities.
Nina P. Jones has been the lead manager of TRREX since Dec 31, 2018. Most of the fund’s holdings were in companies like Prologis, Inc. (7.6%), American Tower Corporation (7.5%) and Equinix, Inc. (6.8%) as of Jun 30, 2023.
TRREX’s 3-year and 5-year annualized returns are 5.9% and 0.8%, respectively. Its net expense ratio is 0.86% compared with the category average of 1.08%. TRREX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
VY CBRE Global Real Estate Portfolio (IRGIX - Free Report) fund invests most of its assets in equity securities of companies that are primarily involved in the real estate industry. IRGIX advisors invest half of their assets in real estate activities and the other half in real estate.
Joseph P. Smith has been the lead manager of IRGIX since Feb 27, 2007. Most of the fund’s holdings were in companies like Equinix, Inc. (7.3%), Prologis, Inc (6.4%) and Simon Property Group, Inc (6.2%) as of Jun 30, 2023.
IRGIX’s 3-year and 5-year annualized returns are 2.9% and 1.5%, respectively. Its net expense ratio is 0.68% compared with the category average of 1.21%. IRGIX has a Zacks Mutual Fund Rank #1.
Fidelity Real Estate Income Fund (FRIFX - Free Report) invests its assets in preferred and common stocks of real estate investment trusts. FRIFX advisors also invest in securities of companies principally engaged in the real estate industry and other real estate-related investments.
William Maclay has been the lead manager of FRIFX since Feb 28, 2019. Most of the fund’s holdings were in companies like Equity LifeStyle Properties, Inc. (2.5%), American Tower Corporation (2.4%), and Prologis Inc (2%) as of Apr 30, 2023.
FRIFX’s 3-year and 5-year returns are 3.9% and 3.1%, respectively. The annual expense ratio is 0.72% compared with the category average of 1.08%. FRIFX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>