Real estate. Whether it comes in the form of dirt, shopping malls or apartment complexes, it's the stuff we love to own-and it's been known to reward some investors. If owning property outright isn't your thing, real estate funds just might be.
Look down Lipper's roster of fund types, and real estate funds are one of the few offering their investors plus-side returns this year. At the end of the third quarter, the average performing fund in that category was up 3.03 percent-not too shabby considering the overall stock market. At the top of the real estate performance list is the Alpine Realty Income and Growth fund. Through October 1, the fund was up 13.41 percent; for the past three years, its average annual total return was 19.86 percent.
So what makes this fund so special? First, it's value-oriented. Portfolio manager Bob Gadsden likes to find undervalued and overlooked companies. Second, because it's a small fund, with about $35 million in assets, Gadsden can take a position in companies that can pay off handsomely for the fund. And third, the fund's not wed to following any particular model or index.
On the downside, real estate funds-like other sector funds-perform in cycles. Many variables make it hard to call the future, so most pros say keep asset allocations in them in the 5 to 20 percent range.
For more information, call (888) 785-5578, or visit www.fundfreebies.com.
Dian Vujovich is an author, syndicated columnist and publisher of fund investing site www.fundfreebies.com.
This story appears in the December 2002 issue of Entrepreneur. Subscribe »
