The 4 Best Real Estate Mutual Funds for Income Investors | InvestorPlace: These are trying times for investors holding real estate equities and real estate mutual funds. Real estate has one of the smallest sector weights in the S&P 500, but it is also one of its worst offenders this year.
Some real estate mutual funds have been hampered by large allocations to retail estate investment trusts (REITs), one of the most vulnerable corners of the broader real estate universe. Many traditional brick-and-mortar retailers are struggling. Some are going out of business, while others are rapidly closing locations, pinching REITs that own malls and other retail space.
Additionally, the real estate sector is historically inversely correlated to rising interest rates. The Federal Reserve has boosted interest rates five times since the start of 2017, including twice this year. Some bond market observers believe there are two more rate hikes in store before the end of 2018.