Mutual fund that will benefit from rising rent prices?

Everyone I know who rents is getting hit with rent increases. I don’t think it’s fair but I’ve got money that I need to invest somewhere. Are there any Vanguard or Fidelity mutual funds that would benefit from this situation? Or other mutual funds?

You need to look at REITs (real estate investment trusts). They are basically conglomerates of properties. Individual REITs own specific property types. For example FPO owns commercial buildings in the D.C. area, while MAA owns apartment communities across the nation. The good ones have been buying up properties while the prices are cheap and will be in a position to profit as rents increase.

There are some REITs that specialize in renting property. In fact virtually all do. There are even mutual funds that exclusively invest in REITs. So you are in luck. Maybe.

Mutual funds:

Fidelity Real Estate FRIFX. This one is rate 5 stars by Morningstar. Up 19% in 2010. Holds some REITs and some other.

Neuberger Berman Real Estate Trust NBRFX Also 5 stars by Morningstar. Up 31% in 2010. Holds mostly REITs.

Cohen & Steers Real Estate CSRSX. 4 starts by Morningstar. Up 27% in 2010. Holds mostly REITs.

There are a lot more besides these.

Some of the larger REITs that you can invest in individually (there are over 160 total) are as follows:

SPG mostly malls. It is the largest by market cap.

PSA public storage

EGR apartments

HCP medical

AVB apartments

VNO mostly office properties

Many, many more. These are the largest.

There are some closed end funds also. Not so many.

RQI, RNP, RFI, RIT, NRO, JRS, and RIF. All pay dividends of better than 5.5% and as must as 8.5%. Most are leveraged. I think that RFI many not be.

Those are just a few of your options.

They were dropping rents in Orlando around the time I left (2 years ago). Something I had never seen before.
I just moved to a fairly new (2005) income restricted apartment $ 589 for 2/2 ( I can’t even remember the time I paid that for a 1/1)
Many people have been doubling up and moving in w/family.
So I’m not sure that rising rates are the general rule, though I have heard stock pundits/gurus go on about it.

Muncie Birder has the best answer. Vanguard’s real estate fund is called Vanguard REIT Index Fund (VGSIX). T. Rowe Price also has an excellent real estate fund (TRREX) – I’m invested in that one.

Not only might these funds benefit from rising rents, they are also a good addition to most portfolios, since they (a) have a low correlation with the stock market, and (b) generally provide pretty decent dividends (especially good for retirement/non-taxable accounts).

I hope that helps. Good luck!

Fund Prices

Your sever must not have been updated, on Yahoo they update at around 6:00

Check morningstar, they have the latest prices.

Try the refresh button on your web browser.

i.e. stock prices are updated when the market closes (around 4:00 pm est). when do prices for mutual funds get updated (what time of day)?

It depends upon the fund. Some price hourly, however 99% of firms price their funds at the close of business. When they release the information is specific to the firm and when it appears is specific to the data provider. You should presume that any price you see was the close of business the prior day, unless you specifically know otherwise. Since funds are not designed to daytrade and since funds have strange redemption rules based upon the phrasing of the Investment Company Act, it doesn’t matter much because you are pretty much required to sell or buy blind.

If I buy at noon tomorrow, it will be at the next official price, which is usually close of business and will happen on the following day. So if the price tonight is 10.13, the real but undisclosed price tomorrow at noon is 10.12 but finishes at 10.14, then I will pay 10.14 the day after tomorrow at the opening of business probably but at some point in the day.

Closed end funds only update once per week, usually on Fridays.

Mutual fund prices are available in two NASDAQ feeds. The first feed used by Yahoo and most other services contains about 5% errors and missing prices and is available about 17:15 Eastern time.

In 2001, NASDAQ introduced a second reporting session from 18:20 to 19:00 Eastern for fund companies to provide late price updates to the electronic media carrying fund data.

Of the major retail fund price distributors only Investors FastTrack holds for the second feed which averages 2% errors and missing data. Additionally, http://www.fasttrack.net hand corrects and provides a proprietary morning feed to thousands subscribers. This feed reduces errors to under 0.3%

Each one is a little different, but normally for US funds it is about 9:00 PM or so, Eastern Time. I know that it is not like stocks, that get updated by the second. Normally, because they own a lot of stocks and securities, etc., it takes them a while to determine what their new value is. This is especially true if they have foreign holdings.