Real estate funds can play an important role in diversifying a portfolio, because real estate returns tend not to be too highly correlated with either the broader stock market or the bond market. Also, because real estate investment trusts tend to pay healthy dividends, these stocks are often seen as income plays. That has broadened their appeal in recent years, as low interest rates have left many investors seeking income wherever they can find it.
Here are four of our favorite picks in the real estate Morningstar Category, which includes funds that invest primarily in domestic (U.S.-based) REITs. All are Morningstar Medalists with long-tenured managers, strong track records, and reasonable price tags.
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David Kathman does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.