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In its compilations of the biggest up and down grade changes for the first three months of 2008, steady performances during the quarter helped lift Ratings grades for a quintet of real estate mutual funds from the "D" range, which corresponds with a "sell" recommendation, to marks of "C" area, which equates with a "hold" advisory.

At the opposite end of the array of ratings changes as of the end of March, as can be seen in the accompanying table, were five funds that suffered double-digit percentage losses for the first three months of 2008.

With commercial real estate investment trusts holding their own thus far in the year, all but one of the real estate funds on the list rewarded their holders with positive investment returns during the difficult first quarter of the year. The

Oppenheimer Real Estate Fund

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, held steady during the period.

The superior performance of the REIT funds for the latest three months followed weakness in 2007 that left the five funds deeply in the red for the latest 12 months.

The five funds with the steepest downward revisions in Ratings scores generally held their own in 2007 before crumbling during the first quarter of this year. Except for the

Schneider Value Fund PPP


, their respective 12-month returns, while negative, are less severe than their year-to-date losses, meaning that all the damage has been in calendar 2008 to date.

The Schneider Value Fund is the only one of the list to descend from Ratings "buy" territory to a grade that equates to a "sell" recommendation. It largest portfolio holdings include

Annaly Capital Management

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Arch Coal

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A pair of heath/biotechnology funds populate the "most deteriorated" ratings list. The

Fidelity Select Medical Delivery Fund

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retrogressed from "hold" to "sell" territory while the

Schwab Health Care Focus Fund

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shifted from a Ratings a "buy" to a "hold" recommendation.

The Fidelity Select Medical Delivery Fund focuses on deliverers of health care such as hospitals, nursing homes and health maintenance organizations. Its largest holdings are

United Health Group

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(MCK) - Get McKesson Corporation Report

. The Schwab Health Care Focus Fund's largest holdings are "Big Pharma" firms


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Richard Widows is a senior financial analyst for Ratings. Prior to joining, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.