Yahoo Finance Is T. Rowe Price Real Estate (TRREX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Real Estate fund? T. Rowe Price Real Estate (TRREX) is a potential starting point. TRREX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
TRREX is one of many Sector - Real Estate funds to choose from. Sector - Real Estate mutual funds are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. This technique makes securities in these funds high dividend players, and even bond-like in some instances, though their risk is similar to equities.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of TRREX. T. Rowe Price Real Estate debuted in February of 1998. Since then, TRREX has accumulated assets of about $549 million, according to the most recently available information. The fund is currently managed by Nina Jones who has been in charge of the fund since January of 2019.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 2.53%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 3.36%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, TRREX's standard deviation comes in at 20.84%, compared to the category average of 16.43%. Over the past 5 years, the standard deviation of the fund is 20.78% compared to the category average of 16.85%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. TRREX has a 5-year beta of 0.95, which means it is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -9.94, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, TRREX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 0.98%. TRREX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Real Estate ( TRREX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
Don't stop here for your research on Sector - Real Estate funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TRREX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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