Comparing real estate funds: Best to buy the index
Of all the mutual fund sector categories, real estate has to be the one where the averages are most misleading. As a group, real estate funds have delivered a consistently high rate of return over the past five years through May, 2005. Their one, three and five-year average annual compound returns of 17.32%, 9.60% and 10.17% respectively placed them fourth among 34 fund categories over each time frame. Taken individually, however, real estate funds as well as their relative performance have been anything but consistent. During the year ended May 31, for example, returns ranged from a high of 29.20% for the Sentry Select REIT Fund to a low of 5.58% for the Great-West Life Canadian Real Estate NL Fund.

STOCKS LURE PROPERTY INVESTORS: New way to buy real estate has more security
At all times, there is good real estate and bad real estate, but well-chosen real estate may be the best investment over time. ''The wealthiest people in the world have always made at least part of their money through investments in real estate,'' says Allen Parker, portfolio manager of the top-performing U.S. real estate fund. And the new way to buy real estate is in a ''securitized form,'' says Parker, who manages the United Services Real Estate fund, based in San Antonio, Tex. In Canada, real estate stocks, limited partnerships and mutual funds allow relatively small investors to dabble in real estate without putting a lot of capital on the line. And they can buy into a portfolio of a calibre they couldn't normally access.

The real-estate industry sets out to add to its know-how
Today's real-estate salesperson is undergoing a "profile change." New salespersons entering the real-estate field are younger, more career-minded, and better educated than their predecessors. They also are more inclined to zero in on a specialized are of brokerage. Seasoned salespersons are more inclined to take advantage of educational opportunities to expand their career capabilities. And many experienced practitioners who have been selling houses for years now are evolving into other specialized fields.

Aggressive marketing efforts spur investment in property
Investment in real estate by Canadian pension funds has grown at the prodigious rate of more than 40 per cent a year in the 1980s and all indications are that pension funds will become increasingly involved in property investment. Some of the major life insurance and trust companies have been able to capitalize on this interest by offering real estate funds. However, within the past year, several financial institutions have decided to wind down their real estate funds because of difficulties they experienced trying to attract pension fund investors. It seems likely that other such real estate funds will fall by the wayside as this market grows increasingly competitive.

Stock plunge casts favorable light on real estate funds
After the October, 1987, market crash, some investors turned to real estate to protect their capital, though the resurgence of equity funds has since cooled their enthusiasm for real estate mutual funds. But with Friday's drop of almost 200 points in the Dow Jones industrial average and about 150 points in the Toronto Stock Exchange 300 composite index, investors might take another hard look at these funds. In the six months to September, the top five equity funds chalked up an average return of 26.5% while the average return for Canada's five real estate funds was 5.3%. In the longer term, Counsel Trust Real Estate is the best-performing real estate fund with a five-year compounded return of 15.3% to September and a three-year compounded return of 14.5%.

No Stopping Banks' Move into Real Estate
Federal regulators are poised to open the real estate management and brokerage business to banks, a move that is fiercely opposed by the real estate industry. Realtors will appeal to Congress to block or overturn the decision, but lawmakers are unlikely to do so. At issue is a proposal from the Federal Reserve and Treasury Department to designate real estate management and brokerage services as "financial services." That designation is key because the '99 financial modernization law allows banks to offer all such designated services through financial-holding companies. The idea was to tear down Depression-era restrictions on banks, a change that will boost competition in financial services and promote one-stop shopping for customers.