Real Estate Funds Have Surprise Success

In terms of average returns in each category of stock mutual funds for the first quarter of 2008, precious metals came out on top.

The surprise was real estate funds.

That refers more to REIT and commercial real estate investment than anything to do with residential housing and the subprime issues.

It looks as if, for now at least, commercial real estate has yet to experience anything close to the problems in the residential sector, however a weakening economy will definitely adversely affect this sector into 2008.

On average, the real estate classification of stock funds was down only 0.63%.

Heavy average losses can be seen in all other categories exposed to the U.S. economy -- and indeed, the global economy -- in particular in emerging economies.

Average of 3 Months (%)
OBJECTIVE	Q1 Average Return per Objective
Sector - Precious Metals	3.61
Sector - Real Estate	-0.63
Sector - Other	-1.50
Sector - Energy/Natural Res	-4.51
Equity Income	-7.72
Growth & Income	-8.07
Global Equity	-9.38
Non-US Equity	-9.52
Growth - Domestic	-10.11
Sector - Utilities	-10.30
Sector - Health/Biotechnology	-10.63
Mid Cap	-10.78
Aggressive Growth	-10.89
Small Cap	-10.93
Emerging Market Equity	-11.10
Sector - Financial Services	-11.77
Sector - Tech/Communications	-16.16
Grand Total	-9.66

Moving away from the averages for each objective and focusing more on individual funds in categories, we see a different picture. There are winners in nearly every category.

We now present the list of the most profitable funds in each below.

NAME	TICKER	TSCR Grade	1 Month Return	3 Month Return	OBJECTIVE
Direxion Nasdaq 100 Bear 2.5X Inv	DXQSX	U	-8.29	38.63	Growth - Domestic
Profunds-Ultra Short Japan Inv	UKPIX	U	5.97	34.01	Non-US Equity
Rydex Dyn-Inv OTC 2x Strategy A	RYVTX	E-	-6.00	31.66	Aggressive Growth
Direxion Small Cp Bear 2.5X	DXRSX	E-	-5.26	19.98	Small Cap
ProFunds-Ultra Short Mid-Cap Inv	UIPIX	E-	0.47	16.65	Mid Cap
Direxion Developed Mkt Bear 2.0X Fd	DXDSX	U	-2.25	15.69	Sector - Other
Profunds-Ultra Sh Emer Mkt Inv	UVPIX	U	9.06	15.10	Emerging Market Equity
PIMCO Commodity Real Ret Str A	PCRAX	B+	-7.48	14.17	Sector - Energy/Natural Res
PIMCO StocksPLUS Tr Sh Strat A	PSSAX	A	-0.43	13.24	Growth & Income
Evergreen Precious Metals A	EKWAX	C+	-9.45	8.56	Sector - Precious Metals
PIMCO RealEstate RlRetrn Str A	PETAX	D	5.87	7.40	Sector - Real Estate
Merk Hard Currency Fund Investor	MERKX	U	1.31	7.02	Sector - Financial Services
Highbridge Stat Mkt Neutral A	HSKAX	U	0.26	4.14	Equity Income
Global Opportunities Bd Inst	GOBIX	U	-0.86	2.03	Global Equity
Fidelity Select Pharmaceuticals	FPHAX	B+	10.21	-0.40	Sector - Health/Biotechnology
Ivy Fund-Science & Tech A	WSTAX	B-	0.72	-8.47	Sector - Tech/Communications
Flex-funds Socially Resp Utilit Fd	FLRUX	A+	-1.86	-8.90	Sector - Utilities

With the downturn in the U.S. markets, globally inverse funds and funds with short strategies generated outstanding returns on a quarterly basis.

Over the last month results have been mixed, but that is to be expected with inverse funds, as they will not capitalize when and if markets rebound after a period of selling.

If the market continues to fall over the longer term then these funds will be the place to be for the next quarter.