Mutual Funds
Investment companies investing in investment instruments including real estate. Mutual funds are popular to investors and represent equity in a professionally managed portfolio of securities. Major benefits of investing in real estate mutual funds are:
- Small minimum investment. An investor with limited funds can accomplish diversification by owning many securities in the portfolio.
- Diversification. Each fund share provides an investor an interest in many real estate companies.
- Automatic reinvestment. Most funds permit reinvestment of dividends and capital gains. Funds usually do not assess a sales fee on automatic reinvestments.
- Automatic withdrawals. Many funds permit shareholders to withdraw funds on a periodic basis.
- Liquidity. An investor may redeem the shares owned.
- Switching. An investor may change in his investments as his objectives change.
Mutual funds are of different types, according to structure, the fees charged, means of trading funds, and investment objectives. In open-end funds, investors buy from and sell their shares back to the fund itself. An example is Fidelity Real Estate. On the other hand, closed-end funds have a fixed number of shares outstanding, which trade among individuals in secondary markets like common stocks. All open and closed-end funds have management fees. A major point of closed-end funds is the size of discount or premium, which is the difference between their market prices and their net asset values (NAVs). Some funds sell at discount, which may make them more attractive. Funds charging sales fees are referred to as load funds. Load funds usually do not do better than no-load funds. Some analysts feel investors should buy only no-load or low-load funds. The prospectus of a real estate fund includes information as the fund's investment objectives, way of selecting securities, management and sales fees, and other costs.
Popular Real Estate Terms
Legal action by an owner of property to oust or exclude an individual or business form using the property. ...
An affiliate of the National Association of Real Estate Boards, engaged in educational programs and publications for its members. Its publications include Real Estate Perspectives and Real ...
A closed-end mortgage is a mortgage in which the collateralized property cannot be used as security for another loan. See also open-end mortgage for a better understanding of the ...
While trying to determine your net income, you might come across the term revenue, sales, or gross income. So what does revenue mean? Through revenue, we understand the income generated ...
An actual location’s elevation defines the height or space below or above an established reference point. We call this point geoid, a math model of our planet’s sea level. ...
An arm’s-length transaction is a business deal, or transaction where the seller and buyer act independently of each other without influence on the other party. What sets these types ...
Legally proper instrument under seal that transfers title to real property from the seller to buyer. ...
Word, or group of words, that identifies a business or one of its products. The name is registered with U.S. Patent Office and provides legal protection for an indefinite number of renewals ...
Six-by-six mile square area of land designated by the intersection of range lines and township lines in the rectangular survey system. ...
Have a question or comment?
We're here to help.