Real Estate Funds Steady In Rough Markets

April 10, 2001 (PLANSPONSOR.com) - Real-estate mutual funds slipped just 2.3% over the past month, better than most domestic stock funds, according to Lipper.

Real estate funds have slipped just 1.6% this year, good enough to beat every investment category but small-cap value stocks.

The funds mainly invest in real estate investment trusts, or REITs, according to Reuters, citing data from the fund data firm. REITs trade like stocks but pay out nearly all of their income in dividends in return for corporate-tax free status. For investors, that means a stable income flow in an otherwise volatile market.

Mirror Image

The roughly 150 real-estate funds have climbed about 19% over the past year, while U.S. diversified stock funds were a mirror image ? plunging 19% during the same period.

The $14.7 million Spirit of America fund led the pack of real-estate funds, returning 1.7% over the four-week period ended April 5, according to the report.

Second best was Cohen & Steers Equity Income Fund, which rose 1.2%. Both funds were lifted by the rising value of healthcare investments.

On the other end of the spectrum were real estate funds that invested in Asia and Europe. Morgan Stanley Dean Witter’s Asian and European real-estate funds were among the worst, dropping 9.9% and 8.5%, respectively. The Alpine International Real-Estate Fund fell 8.6%.

– Nevin Adams editors@plansponsor.com

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