Ad of Fidelity Real Estate Mutual Funds

Find investing review of Fidelity Real Estate Mutual Funds article. These mutual funds invest in real estate companies including U.S. stocks and international stocks.

Real Estate Investment

Small or big investors can invest in real estate sector through various channels. One of the ways is through investment funds such as mutual fund, exchange traded fund, or closed end fund. Flipping through financial newspaper or magazine, you will find ad of Fidelity Real Estate Mutual Funds which is title as “Location, Location, Location.”

Whether these mutual funds are suitable for your investment account or not, you should find out the details. Investing in your brokerage account, 401(k) plan, and retirement account needs extensive research and study especially for long term investment. Find out the fund performance and details below.

The investment ad details are as follows:

Location, Location, Location 

Fidelity is the place for Real Estate Funds. 

Real estate fundamentals are improving. Consider these insights from the Fidelity research team:

• Lack of Supply. New building – including commercial real estate – was 60% lower over the past 5 years.
• Surging Demand. Forecasted new housing needs will total over 7.5 million units over the next 5 years.

What could this mean for you? These Fidelity funds can help you add real estate to your portfolio.

• Fidelity Real Estate Income Fund (FRIFX) – An income focused fund with a mix of real estate equity and debt securities*
• Fidelity Real Estate Investment Portfolio (FRESX) – A diversified core REIT fund that seeks both income and capital growth
• Select Construction and Housing Portfolio (FSHOX) – A growth-oriented fund that invests in companies involved in commercial and residential building
• Fidelity International Real Estate Fund (FIREX) – A growth-oriented fund that invests primarily in non-U.S. REITs and common stocks

Open an account today - 800.FIDELITY - Fidelity.com/location

Turn here – Fidelity Investments

Before investing, consider the fund’s investment objectives, risks, charges, and expense. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

US Real Estate Funds

The main objective for the Fidelity Real Estate Income fund (FRIFX) is to seek higher than average income; and capital growth is the secondary objective. This equity fund has 5-stars rating from Morningstar. It is also popular among investors with $3.8 billion of total net assets. The fee (0.84%) is low compared to the average in Real Estate category, 1.34%. Investors of this fund receive $0.16 in September 2013 as part of the annual 4.86% dividend yield.

This mutual fund employs Mid Value investment style and it has YTD return of 5.47%. The 10-year annualized return is 7.19%. The best 1-year total return within 7 years of positive return was in 2009 with 46.82%. The 3-year beta risk is 0.34.

The top holdings as of September 2013 are MFA Financial Inc, Equity Lifestyle Pptys Inc, Acadia Realty TR REIT and Ventas Inc REIT. The top asset allocations are Bonds (48.42%) and Domestic Equities (45.58%).

Another U.S. real estate mutual fund in the ad is Fidelity Real Estate Investment Portfolio fund (FRESX). Morningstar analysts rank the FRESX fund with Bronze and 3-star ratings. It has been in the market since November 17, 1986. The annual expense ratio is 0.80%. And it also has 30-day SEC yield of 2.13%. Its total net assets are $3.6 billion.

Steve J. Buller is the current fund manager. It has a 5-year average return of 7.14%. This stock fund has 20 years of positive return and 6 years of negative return. This is a no load fund. The minimum initial investment for brokerage account is $2,500. You can also invest it in your 401k or retirement account.

The top 10 holdings represent 59.13% of the total portfolio. The top 3 stocks in its portfolio are Simon Property Group Inc – REIT, Public Storage, Ventas Inc REIT and Host Hotels & Resorts Inc.

Fidelity Select Construction & Housing fund (FSHOX) is the next choice for Fidelity Real Estate fund. This stock fund seeks for capital appreciation. It is currently managed by Holger Boerner. The fund has 3-stars rating from Morningstar. The total net assets are 4477.2 million. This fund was formerly named Select Housing Fund.

The fund’s benchmarks are S&P 500 and MSCI IMI Construction & Housing 25/50. It is on the 30th rank among the peers in Consumer Cyclical category. Based on the load adjusted returns, the fund has returned 23.33% over the past 1-year and 14.46% over the past 5-year.
The top 5 holdings are Home Depot Inc, Lowes Cos Inc, Masco Corporation, Vulcan Materials Co and Avalonbay Communities Inc REIT. The major market sector is Consumer Discretionary (50.56%).

International Real Estate Fund

Another Real Estate fund is Fidelity International Real Estate Fund (FIREX) in the Global Real Estate category. It has 1.14% annual expense ratio. The fund uses Large Blend investment style. It is ranked with 4-stars rating by Morningstar. The yield is 1.65% and the most current distribution is $0.12 in September 2013.

It is currently traded at $10.64. The YTD return is 15.52%. The performance of the fund based on the load adjusted returns are 25.54% in 1-year, 10.60% in 3-year and 8.24% in 5-year.

The major market sector as of third quarter of 2013 is Financials (93.79%). Mitsui Fudosan Co and Westfield Group Stapled Unit are the top holdings.

Opinions

• Not all funds offered in the ad are created equal. Only 2 funds are suitable for long term investment: Fidelity International Real Estate Fund and Fidelity Real Estate Income Fund.
• If you don’t own a house, investing in real estate fund is recommended.
• Real estate fund also provides high income for investors.