For investors looking to park their funds in the real estate sector, mutual funds are the most cheapest and convenient method. This category of funds also offers superior protection against inflation. The real estate sector has seen tough times recently but the presence of these investments generally adds stability to a portfolio. This is because the volatility in property prices is far less compared to the kind experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while reducing the associated risk significantly.

Below we will share with you the 5 best performing real estate mutual funds year to date.  To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.

Ian S. Goltra is the Fund Manager and he has been managing this real estate mutual fund since 2010.

ProFunds Real Estate UltraSector (REPSX) seeks to provide returns which are equivalent to one and a half times the daily performance of the Dow Jones U.S. Real Estate Index. The fund’s portfolio consists of equity securities and derivatives which have the ability to deliver such returns. The real-estate mutual fund has a three year annualized return of 35.06%.

The real estate mutual fund has an expense ratio of 2.73% compared to a category average of 1.38%.

T. Rowe Price Real Estate (TRREX) invests a large share of its assets in companies from the real estate sector. Not more than 20% of its assets may be invested in companies which generate a significant part of their revenues by servicing real estate companies. The real-estate mutual fund has a three year annualized return of 29.13%.

As of March 2012, this real-estate mutual fund held 39 issues, with 10.09% of its total assets invested in Simon Property Group, Inc.

Fidelity Real Estate Investment (FRESX) seeks both capital growth and income. The fund invests the majority of its assets in real estate companies or other investments related to the sector. The real estate mutual fund has a three year annualized return of 31.84%.

Steve J. Buller is the Fund Manager and he has been managing this real estate mutual fund since 1997.

Forward Real Estate A (KREAX) invests a large share of its assets in securities issued by companies from the real estate sector. The fund focuses on investing in common stocks, related convertible securities, units of REITs and preferred stock. The real-estate mutual fund has a three year annualized return of -5.12%.

The real estate mutual fund has a minimum initial investment of $4,000 and an expense ratio of 1.50% compared to a category average of 1.38%.

To view the Zacks Rank and past performance of all real estate mutual funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.