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

Below we share with you three top-ranked real estate mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.

DFA Global Real Estate Securities Portfolio (DFGEX - Free Report) fund aims for long-term capital appreciation. The fund seeks to gain exposure to a wide portfolio of securities of U.S. and foreign companies in the real estate industry. The fund invests with a focus on real estate investment trusts or companies that the advisor evaluates as REIT-like. The fund may pursue its objective by investing in DFA Real Estate Securities Portfolio, DFA International Real Estate Securities Portfolio and/or in securities of companies operating in the real estate industry. DFGEX has three-year annualized returns of 6.3%.

As of February 2019, DFGEX held 169 issues, with 34.89% of its assets invested in DFA International Real Estate Sec I.

Davis Real Estate Fund Class A (RPFRX - Free Report) aims for total return through a combination of income and growth. The fund’s adviser applies the Davis Investment Discipline to invest the majority of the fund’s assets in securities issued by companies operating in the real estate industry. The fund mostly invests in common stocks of U.S.-based companies and may also invest in non-U.S. companies. RPFRX has three-year annualized returns of 7.8%.

Andrew Adams Davis is one of the fund managers of RPFRX since 1994.

Fidelity Series Real Estate Income Fund (FSREX - Free Report) mostly invests in common and preferred stocks of real estate investment trusts. The fund aims for above-average income by investing a minimum of 80% of its assets in securities of companies in the real estate industry. The fund invests in U.S. and non-U.S. companies alike. FSREX has three-year annualized returns of 7.1%.

FSREX carries an expense ratio of 0.00% compared with the category average of 1.23%.