3 Real Estate Mutual Funds to Buy as Housing Market Improves

With the housing market’s future looking brighter, now is the time to start thinking about investing in real estate mutual funds. A recent report from the Department of Commerce showed that construction spending was up 0.3% in the month of March after increasing by 1% in February. Residential investment also jumped 14.8% year-over-year in the first quarter.

Economists who recently took part in the NAHB Spring Construction Forecast Webinar predicted that constructions for single family homes may rise by 14% to 812,000 units in 2016 and by an additional 19% in 2017. The group also projected a 3.3% jump in residential remodeling in 2016, and a 1.3% increase in 2017.

Here are 3 real estate mutual funds to consider as the housing market improves.

AMG Managers Real Estate Securities (MRESX)

The MRESX’s portfolio consists of 40-60 real estate company stocks, and that is expected to remain the same for the foreseeable future. MRESX invests in REITs and other types of real estate companies.

The fund has a 4.2% return year-to-date, 9.6% return annually, and a 9.1% three-year return.

The AMG Managers Real Estate Securities fund was named the best real estate fund for 10 years, and boasts net assets of more than $369 million.

Fidelity Real Estate Investment Portfolio (FRESX)

The FRESX invests 80% of its assets in companies engaged in the real estate industry as well as other real estate related investments. The fund typically invests in common stocks.

FRESX boasts a year-to-date return of 4.88%, 1-year return of 10.46% and a 3-year return of 7.94%. Annual expense ratio is just 0.78%, which is lower than average.

Rowe Price Real Estate (TRREX)

TRREX invests 80% of its net assets in real estate companies. The fund’s one-year return is 7.18%, three-year return is 8.33% and five-year return is 9.88%.

The annual expense ratio is low at 0.76%.

These three real estate mutual funds are expected to outperform as the housing market continues to show signs of improvement.

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Daniel Simmons