Real estate fund comparison – the best real estate funds for building wealth
Real estate fund with a focus on Germany
Investors who primarily want to benefit from the German real estate market have a large selection of open-ended real estate funds. And the German real estate market is interesting for investors around the world, as the real estate investment market trend barometer 2018 from Ernst & Young Real Estate GmbH shows. According to the auditing company, 94 percent of the investors surveyed stated that Germany is an attractive or very attractive location for a real estate investment. Even in a European comparison, the German market convinces investors. In a European comparison, Germany is “very attractive” for more than half of the investors surveyed.
A fund that – as the name suggests – focuses on the German real estate market is the Focus Living Germany of the capital management company IntReal International Real Estate (ISIN DE000A12BSB8/WKN A12BSB). The distributing fund of the subsidiary of Degussa Bank scores with a very good Scope rating of “a+”. In addition to purely residential real estate, the fund also invests in social and senior citizen real estate, office buildings and commercial real estate.
The fund volume of the Focus Living Germany is 923 million euros. The performance in the past year was 3.44 percent. The distribution takes place annually. In the fact sheet of the capital investment company, Klaus Niewöhner-Pape, Managing Director of Industria Wohnen, defines the goal of the fund in more detail: “Focus Wohnen Deutschland strives to acquire buildings of good quality and residential complexes in an environment worth living in and to pursue a sustainable investment strategy.” recommends this fund for investors who want to invest their money for at least five years. The fund is significantly smaller than all other funds in our test – and only has 48 fund objects. The fund has been in cash stop since November 2021. In the future, however, a cash call is to be announced again by the corporation. With this fund, investors have to plan for annual running costs of 1.29 percent (TER) and a front-end load of 5.00 percent.
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According to the fund management, UniImmoDeutschland from UnionInvestment (ISIN DE0009805507/WKN 980550) is only suitable for investors who want to invest their money for the long term (more than four years). If you choose this real estate fund, you also pay a front-end load of 5.00 percent and have to reckon with running costs (TER) of 0.93 percent per year. Despite its focus on Germany, the UnionInvestment fund does not only invest in the German real estate market. A little more than 45 percent of the fund properties are located in the EU or in the European currency area. Almost half of real estate assets are invested in office buildings. In the Scope rating, the real estate fund from UnionInvestment comes off only slightly worse than the fund from IntReal and receives a rating of “a” – its return is above the expected return of comparable portfolios. The fund has a fund volume of more than 15 billion euros and is significantly larger than the Focus Living Germany fund.
The two mentioned real estate funds with a focus on Germany are the cheapest in terms of TER in our entire test. The Wertgrund WohnSelect D from the capital investment company Pramerica Property Investment is somewhat more expensive. It received an “a+” rating from Scope – incidentally, this is the highest rating in the real estate fund category. However, there has been a cash stop for the Wertgrund WohnSelect D since October 2021, which means that the fund management is currently no longer accepting any new investment money. So why don’t we want to withhold this fund from you? It is the best residential-focused fund on the market. You can also continue to purchase fund shares in WohnSelect D via the stock exchange. The running costs (TER) are 1.83 percent per year. In addition, investors pay a sales charge of 5.00 percent and a performance-related commission. The fund’s performance speaks for itself: the performance since the fund was launched in 2010 is 110.65 percent. The fund volume is 243.75 million euros and the fund is invested in a total of 2,148 residential units and 118 commercial units.