Real estate investment trust funds

Do you want to invest in real estate without the hassle of being a landlord? Invest in real estate investment trusts (REITs), which are stocks of companies that invest in real estate. These funds typically invest in properties such as apartment buildings, shopping centers, and other rental properties. Of course, it's a hassle to evaluate REIT stocks, but you can always (you guessed it) invest in a mutual fund of REITs!

W? _ w REITs are small-company stocks and usually pay decent dividends. As such, they are not appropriate for higher-tax-bracket investors investing money outside of retirement accounts. Most of the larger, diversified U.S. stock funds that I recommend earlier in this chapter have a small portion of their fund's assets invested in REITs, so you'll have some exposure to this sector with investing in a REIT focused fund.

Fidelity Real Estate, the oldest REIT fund, has been managed by Barry Greenfield since its inception in 1986. Greenfield is an investing veteran who has been with Fidelity since 1968. This fund has expenses of 0.9 percent per year. Initial minimum investment is $2,500 ($500 for retirement accounts), a 800-544-8888.

Cohen & Steers Realty Shares has been managed by Martin Cohen and Robert Steers since the fund began in 1991. This fund is best purchased through most discount brokers, where the minimum initial investment is much lower (typically $2,000) instead of the normal $10,000. Discounters also offer it without transaction charges. Annual expenses are 1.1 percent. ® 800-437-9912.

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