Advertisement
investing

Out of the Ordinary Real Estate Player

Third Avenue Real Estate Value invests for growth, not yield.

Now that the housing market appears to be in full retreat, investing in real estate funds seems as fashionable as wearing white after Labor Day. But the funds have performed surprisingly well this year, and now one of the best has reopened to new clients.

Most property funds are pack animals, investing the bulk of their assets in high-yielding real estate investment trusts. Not Third Avenue Real Estate Value (symbol TAREX; 800-443-1021), which invests only about 30% of its $3-billion portfolio in REITs. Manager Michael Winer sees better deals in developers. He also deploys more money overseas than most of his peers; more than one-third of the fund's assets is in foreign stocks. Winer's strategy means the fund is no yield hog. It pays out about 1% annually.

Advertisement - Article continues below

One top holding is developer St. Joe (JOE), the largest private landowner in Florida. The stock, which hit $85 in 2005, recently fetched $48. As the stock fell, Winer bought more, boosting St. Joe to 8.1% of assets. He thinks the market will recognize its merits as St. Joe slowly converts its vast land hoard into bungalows for retiring baby-boomers. "I wish I could find six more companies like St. Joe," Winer says.

Advertisement
Advertisement - Article continues below

Over the past five years to August 1, his fund returned 19% annualized. That's one percentage point per year behind the group average. But over its eight-year history, Third Avenue's 19% annualized gain tops that of its rivals by more than two percentage points a year. And it achieved its record with about 30% less volatility than its average peer. Third Avenue fund has no sales charge, and annual fees of 1.14% are below average. In sum, this fund is a fine choice for tapping into an uncertain real estate market.

Advertisement

Most Popular

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020

Recommended

13 Best Vanguard Funds for the Next Bull Market
mutual funds

13 Best Vanguard Funds for the Next Bull Market

Optimistic that the bounce since March is indeed the start of the next bull market? Here are the 13 best Vanguard funds to help you make the most of i…
July 7, 2020
15 Best Fidelity Funds for the Next Bull Market
mutual funds

15 Best Fidelity Funds for the Next Bull Market

Investors looking to squeeze more profit from the next bull run can look to Fidelity funds for strong active management and tactical investments.
July 7, 2020
10 Stocks to Invest in the Health Care Revolution
healthcare stocks

10 Stocks to Invest in the Health Care Revolution

These companies are fighting disease and improving our standard of care.
July 2, 2020
Cash In With This Gaming ETF
Technology

Cash In With This Gaming ETF

Cash in on the video gaming craze with this fund.
July 1, 2020