Real Estate Sector Ideas

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>>> Top funds for real estate stocks



http://m.kiplinger.com/article/investing/T044-C008-S003-5-reits-to-buy-now-for-income-and-growth.html



If you prefer to buy real estate investment trusts through a fund, you have plenty of choices. One good one is Manning & Napier Real Estate S (symbol MNREX), which holds 56 real estate stocks—mainly REITs such as mall owner Simon Property Group and storage firm Prologis. Over the past five years through June 10, the fund returned 12.4% annualized, beating 93% of its peers. One drawback: annual fees, at 1.09%, are above average.

Fidelity Real Estate Investment (FRESX) returned 12.5% annualized over the past five years. Veteran manager Steve Buller looks for REITs that offer growth at a reasonable price and says he’s emphasizing health care and triple-net-lease REITs these days. The fund yields 2.5% and costs 0.78% in annual expenses.

If you simply want to track the REIT market, buy Schwab U.S. REIT ETF (SCHH), an exchange-traded fund that follows the Dow Jones U.S. Select REIT index, a basket of 96 stocks weighted by market value. Yielding 3.1%, the ETF pays out more than most mutual funds, thanks to a rock-bottom expense ratio of 0.07%.

For ultra-high income, consider iShares Mortgage Real Estate Capped ETF (REM). The fund, which yields 11.0%, invests in mortgage REITs—firms that own real-estate-backed loans. Mortgage REITs could tumble if short-term interest rates climb sharply while long-term rates stay flat or decline (squeezing the REIT’s profit margins). But that looks unlikely over the next year. Annual expenses are 0.48%.

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