Investments in the real estate sector are expected to provide excellent protection against inflationary pressures. This is why they should necessarily be part of portfolios with a long term horizon and aid in diversification. Additionally, they lend stability to a portfolio, despite the difficult phase real estate has passed through recently. This is because the volatility in property prices is far less compared to the kind experienced by stocks over the longer term. Real estate funds offer a cost effective and convenient method of holding these investments.
Below we will share with you the 5 best performing real estate mutual funds year to date. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
| Mutual Fund | Zacks Rank | Total Return YTD |
| Forward International Real Estate A | #1 Strong Buy | 25.3% |
| Forward Real Estate Long/Short A | #1 Strong Buy | 12.9% |
| T. Rowe Price Real Estate | #1 Strong Buy | 12.5% |
| Fidelity Real Estate Investment | #1 Strong Buy | 11.8% |
| CGM Realty | #1 Strong Buy | 11.3% |
Forward International Real Estate A (KIRAX) invests the majority of its assets in foreign equity securities issued by companies from the real estate sector and those engaged in related activities. The fund may purchase emerging market securities and purchase ADRs. The real-estate mutual fund has a three year annualized return of 25.86%.
Ian S. Goltra is the Fund Manager and he has been managing this real estate mutual fund since 2010.
Forward Real Estate Long/Short A (KSRAX) seeks both current income and capital appreciation. The fund invests the majority of its assets in real estate securities. These may be issued by real estate investment trusts or companies operating in the sector. The real-estate mutual fund has a ten year annualized return of 43.53%.
The real estate mutual fund has a minimum initial investment of $4,000 and an expense ratio of 1.67% compared to a category average of 1.38%.
T. Rowe Price Real Estate (TRREX) invests a large share of its assets in companies from the real estate sector. Not more than 20% of its assets may be invested in companies which generate a significant part of their revenues by servicing real estate companies. The real-estate mutual fund has a three year annualized return of 45.71%.
As of March 2012, this real-estate mutual fund held 39 issues, with 10.09% of its total assets invested in Simon Property Group, Inc.
Fidelity Real Estate Investment (FRESX) seeks both capital growth and income. The fund invests the majority of its assets in real estate companies or other investments related to the sector. The fund is non-diversified and invests in both domestic and foreign securities. The real estate mutual fund has a three year annualized return of 47.64%.