Top 10 Best Performer Real Estate REIT Mutual Funds of 2010: Part 1

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Intro

One of the easiest ways to invest in Real Estate is by investing in REIT Equity Mutual Funds. The rule of thumb is to invest between 5%-10% of your investment asset in REIT Funds for portfolio diversification. If you don’t own a property, you will need to invest at least 10% of your total portfolio asset in REIT. If you have a house, you will only need to invest 5% asset in this REIT fund. If you own multiple properties, you don’t have to invest in REIT hence you already have too many eggs in one basket (i.e. REIT sector). REIT equity fund is also known as a specialty sector mutual fund. The following is my first part of Top 10 Best Performer REIT Stock Mutual Fund of 2010 article. I always like to check the fund winner of 2010 for future investment strategy in mutual funds or stocks. The fund list may include US REIT and Global REIT.

Note: REIT = Real Estate Investment Trusts

Top 10 Best Performer Real Estate Mutual Funds of 2010 are:

  1. PIMCO Real Estate Real Return Strategy A
  2. JPMorgan US Real Estate A
  3. TIAA-CREF Real Estate Sec Retail
  4. Forward Select Income A
  5. First American Real Estate Secs A
  6. JPMorgan Realty Income A
  7. Fidelity Real Estate Investment
  8. T. Rowe Price Real Estate
  9. ING Real Estate A
  10. DFA Real Estate Securities I
  11. Vanguard REIT Index Inv


Top 10 REIT Mutual Funds Info - Part 1

(click column header to sort results)
No  
Mutual Funds Description  
Ticker  
Rank  
Yield  
Expense ratio  
M* Rating  
Total Asset (Mil)  
Min. To Invest  
1
PIMCO Real Estate Real Return Strategy A
PETAX
1
31.72%
1.19%
2
$622.60
$1,000
2
JPMorgan US Real Estate A
SUSIX
9
1.45%
1.18%
2
$1,400.00
$1,000
3
TIAA-CREF Real Estate Sec Retail
TCREX
14
1.89%
0.75%
3
$710.51
$2,500
4
Forward Select Income A
KIFAX
15
8.99%
1.52%
4
$1,230.00
$4,000
5
First American Real Estate Secs A
FREAX
17
2.22%
1.20%
5
$2,460.00
$2,500
Updated on 2/28/2011
Fund Holding
Fund Holding | Source

1. PIMCO Real Estate Real Return Strategy A (PETAX)

The investment in this PIMCO Real Estate Real Return Strategy A fund is seeking for maximum real return constantly with discreet board of investment management. The main investment of the assets is in real estate-linked derivative instruments supported by a portfolio of inflation-indexed securities and other Fixed-Income Instruments. This PIMCO fund may also invest in securities dominated in foreign currencies, preferred stocks and in U.S. dollar denominated securities of foreign issuers.

The fund is managed by Mihir Worah since December 2007. This expense ratio for this fund (PETAX) is 1.19% per year. It has 0.25% 12b1 fee. While the maximum front end sales load is 5.50% with no deferred sales load. The fund can be purchased at over 70 brokerages, such as Fidelity Retail FundsNetwork, E TRADE Financial, TD Ameritrade, Inc., etc. The other tickers of this PETAX fund are PETBX, PETCX, PETDX, PETPX and PRRSX.

The top sectors of the fund allocation of PETAX are government-related (81.0%), net cash & equivalents (8.0%), invest grade credit (3.0%), high-yield credit (2.0%), emerging markets (2.0%), mortage (1.0%), non-US developed (1.0%) and others (2.0%).


Fund Holdings
Fund Holdings | Source

2. JPMorgan US Real Estate A (SUSIX)

JP Morgan US Real Estate investment pursues a high level of current profits and long-term capital appreciation. Most of its assets (80%) are invested in the equity securities of publicly-traded real estate companies operating in the United States. Besides that, it normally invests in an industry in the real estate sector (around 25%), in U.S. government securities, other investment-grade fixed-income securities, cash and cash equivalents (around 20%) and up to 15% of assets in foreign securities.

The fund performance is as below:

1 year: 25.63%

3 years: -5.66%

5 years: 0.01%

10 years: 9.26%

Kenneth D. Statz has been the fund manager since 1997. The expense ratio of this fund is 1.18% per year. The 12b1 fee is 0.25%, lower than the other tickers such as 0.50% for JREZX and 0.75% for JPRCX. The minimum balance to invest in this fund (SUSIX) is $1,000 for either brokerage or IRA account. This fund is also offered in most IRA retirement, 401K retirement account, and 529 accounts. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other class tickers of this fund are JPRCX, JREZX, JURRX and SUIEX.

Top 10 holdings for this fund are HCP, Inc. (8.6%), Public Storage (7.9%), Equity Residential (7.7%), Simon Property Group, Inc. (7.1%), Host Hotels & Resorts, Inc. (6.8%), Boston Properties, Inc. (6.5%), Essex Property Trust, Inc., (4.6%), Apartment Investment & Management Co. (4.5%), AMB Property Corp. (4.5%) and Ventas, Inc. (4.1%).


3. TIAA-CREF Real Estate Sec Retail (TCREX)

Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF) investment hunts for a satisfactory long-term total return. The major assets investments are in in the equity and fixed-income securities of companies that are principally engaged in real estate industry such as REITs. The remaining assets investment is in equity and debt securities of issuers that are not related to the real estate industry. It may as well invest in real estate securities of foreign issuers.

This TIAA-CREF Real Estate Securities fund is managed by David W. Copp since 2005. The expense ratio of this fund is 0.75% per year which is quite low compared to the average in the category which is 1.49%. The 12b1 fee is 0.25% but with no sales load. This fund has returned 33.94% over the past one year and 1.42% over the past five years. The minimum balance to invest in this fund is $2,500 for brokerage account and $2,000 for IRA account. Other class tickers for this fund are TIREX, TRRPX and TRRSX.

Top 10 holdings of this fund as of January 2011 are Simon Property Group, Inc (10.3%), Equity Residential (6.2%), Boston Properties, Inc (4.9%), Public Storage, Inc (4.7%), Vornado Realty Trust (4.7%), Host Marriott Corp (4.3%), CP, Inc (3.8%) , AvalonBay Communities, Inc (3.3%), Developers Diversified Realty Corp (2.8%) and Ventas, Inc (2.8%). The percentage of the holdings based on the company size is as below:

  1. Large Holdings (over $15 billions): 20.2%
  2. Mid Holdings ($4billions - $15 billions): 49.5%
  3. Small Holdings (under $4 billions): 30.3%


Source

4. Forward Select Income A (KIFAX)

The Forward Select Income fund investment pursuits for long term capital growth and high current income. Most of the assets investment of this non-diversified fund is invested in REITs or MLPs (master limited partnerships) income-producing securities.

The yield of this fund is quite high compared to other in this same class, which is 8.99%. But the expense ratio of this fund (1.52%) is a bit higher than the average (1.49%). There is 0.25% 12b1 fee and 5.75% maximum front end sales load. The minimum balance to invest in this fund for either brokerage or IRA account is $4,000. The return percentage of this fund over the past five years is 1.22%. This fund can be purchased from more than 68 brokerages, such as Scottrade Load, Protected Investors of America, Fidelity Retails Funds Network, etc. The fund manager is Joel Beam, who has been joining since March 2001. Other class tickers of this fund are KIFBX, KIFCX, KIFYX and FSIMX.

The top 3 property sectors diversification based on portfolio holdings percentage are Retail (27.0%), Specialized (27.0%) and Office (19.0%). Top 10 holdings out of total 134 holdings of this fund as of January 2011 are CBL & Associates Properties, Inc., Apartment Investment & Management Co., BioMed Realty Trust, Inc., Weingarten Realty Investors, Ashford Hospitality Trust, Inc., Sunstone Hotel Investors, Inc., Toys R us PropertyCo.; I LLC, Gtd, Notes, Omega Healthcare Investors, Inc., Vornado Realty LP and Kimco Realty Corp.


Source

5. First American Real Estate Secs A (FREAX) or Nuveen Real Estate Securities Fund A (FREAX)

First American Real Estate Secs A (FREAX) now Nuveen Real Estate Securities Fund A (FREAX). Effective 01 January 2011, First American Funds’ long-term mutual funds, including equity, fixed income and specialty funds, have been added to the Nuveen Asset Management family of mutual funds following Nuveen Investments' acquisition of First American Funds' long-term mutual funds on Dec. 31, 2010.

The purpose of this First American Real Estate investment is to seek long-term capital appreciation as well current income. The assets invested by this fund may futures contracts, options on futures contracts, utilize options, and foreign currency exchange contracts. Most of the investment is in income-producing common stocks of publicly traded companies engaged in the real estate industry as well as in non-dollar denominated and dollar-denominated equity securities of overseas issuers that are either represented by depositary receipts or registered on a U.S. stock exchange.

This fund is managed by John G. Wenker since October 1999. The expense ratio of this fund is 1.27% per year. It has 0.25% 12b1 fee and 5.50% for max front end sales load. The minimum balance to invest in this fund is $2,500 for brokerage account. The fund has returned 25.58% over the past one year and 11.73% over the past ten years. This fund is also offered in most IRA retirement, 401K retirement account, and 529 accounts. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other class tickers for this fund are FREBX, FRLCX, FRSSX and FARCX.

The top 10 holdings of this fund are Simon Property Group Inc. (9.9%), Public Storage (4.7%), Vornado Realty Trust (4.6%), AvalonBay Communities Inc., (4.6%), HCP Inc., (4.5%), Equity Residential (4.2%), Boston Properties Inc. (3.9%), Ventas Inc., (3.3%), Host Hotels & Resorts Inc., (2.9%) and Federal Realty Investment Trust (2.3%). Top sectors allocation is Offices (23.4%), Apartments (15.5%), Healthcare REITs (13.7%) and Malls (13.5%).

Next

For the next 5, please check my following article:


Disclosure: I have no affiliation with any of these funds. I also have no position in these funds. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results.


Top 10 REIT Mutual Funds Performance

(click column header to sort results)
No  
Mutual Funds Description  
Ticker  
1 Yr  
3 Yr  
5 Yr  
10 Yr  
1
PIMCO Real Estate Real Return Strategy A
PETAX
34.35%
-0.85%
3.18%
N/A
2
JPMorgan US Real Estate A
SUSIX
25.63%
-5.66%
0.01%
9.26%
3
TIAA-CREF Real Estate Sec Retail
TCREX
33.94%
-3.20%
1.42%
N/A
4
Forward Select Income A
KIFAX
23.81%
4.02%
1.22%
N/A
5
First American Real Estate Secs A
FREAX
25.58%
-1.71%
3.40%
11.73%
6
JPMorgan Realty Income A
URTAX
23.97%
-6.06%
0.08%
9.72%
7
Fidelity Real Estate Investment
FRESX
31.79%
-1.97%
1.40%
10.41%
8
T. Rowe Price Real Estate
TRREX
34.31%
-1.91%
2.31%
11.14%
9
ING Real Estate A
CLARX
23.90%
-2.65%
1.99%
10.34%
10
DFA Real Estate Securities I
DFREX
31.36%
-2.42%
1.66%
10.71%
11
Vanguard REIT Index Inv
VGSIX
31.25%
-1.72%
2.43%
10.81%
12
Cohen & Steers Realty Income A
CSEIX
25.61%
-1.07%
0.92%
9.67%
13
DWS RREEF Real Estate Securities A
RRRAX
23.02%
-4.74%
1.09%
11.02%
14
Goldman Sachs Real Estate A
GREAX
22.35%
-6.81%
-0.60%
8.99%
Updated on 2/27/2011

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2 comments

Ruchi Urvashi profile image

Ruchi Urvashi 4 years ago from Singapore

Great information about REITs mutual funds and diversification.


chan0512 profile image

chan0512 4 years ago from Camarillo, CA Author

Thanks Ruchi, Glad you like this article. Please check my other article as well. All the best.

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