Real Estate Investing Can Be Tricky

Identifying the best real estate investment funds for a given market environment can be tricky. This is especially true today with conflicting stories in the news media about the health of the real estate market. Indeed, we can see the diverging trends when we take a closer look at some of our favorite Fidelity mutual funds that invest in this space.


We have highlighted the Fidelity International Real Estate Fund (FIREX, last change: 0.22%) in past blog entries, as one of the best performing Fidelity funds in 2012. FIREX continues its stellar performance and has gained 34.32% year-to-date. The gains are driven by increased appetite for Chinese and European property shares. Adding to international real estate positions can make sense for aggressive investors, as long as the price stays above the bullish red trendline.


The Fidelity Select Construction and Housing Fund (FSHOX, last change: 0.44%) made a new 52-week high today driven by holdings in great performing stocks, such as Home Depot and Lowe’s. FSHOX has moved now to the number three spot in out daily momentum screen of Fidelity funds. However, we’d like to see a more decisive breakout from the recent high-volatility range before we would consider an overweight position in FSHOX.


The technical indicators for the Fidelity Real Estate Investment Fund (FRESX, last change: -0.29%) are negative with FRESX below its 100 day moving average and the trendline showing a downtrend. We would avoid investing in FRESX until we can see consolidation on the chart and the price starts moving above the moving average.

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