Fidelity Management and Research Company is one of the oldest mutual fund companies in the world, as well as one of the largest, with $4.9 trillion in customer assets. Fidelity offers hundreds of low-cost, no-load mutual funds and exchange-traded funds (ETFs) across the full spectrum of asset classes and investment styles. It is well-known for its actively managed funds, and supports this investment philosophy with a deep pool of more than 150 in-house analysts and portfolio managers. The fund has a low expense ratio of 0.78%, compared to the real estate category average of 1.32%, and held $4.4 billion in assets, as of February 2016. The fund's focus is to deliver current income along with capital appreciation. The portfolio's trailing 12-month yield is 1.57%, and it typically holds 40 to 60 stocks, primarily real estate investment trusts (REITs). The top five real estate subsectors represented in the fund are industrial/office, residential, retail, self-storage and health care facilities.
Public Storage (PSA)
Public Storage (NYSE: PSA), the fund's largest holding with a portfolio weighting of 7.10%, is a REIT that acquires, develops and operates self-storage facilities in the United States and Europe. The company has surprised analysts eight out of the past 10 quarters with earnings exceeding consensus estimates. The stock yields 2.52% and closed at $269.45 per share on March 18, 2016, near its high of $271 for the preceding 52 weeks.
Simon Property Group Inc. (SPG)
Simon Property Group Inc. (NYSE: SPG) is the fund's second-largest holding with a portfolio weighting of 6.35%. Established in 1960 as one of the first REITs, the company develops, owns and manages regional malls, premium outlets and community/lifestyle centers across the United States. It is rated a strong buy or buy by 20 of the analysts covering the stock. The stock yields 3.12% and closed at $204.96 per share on March 18, 2016, near its high of $208 per share for the preceding 52 weeks.
Digital Realty Trust Inc. (DLR)
Digital Realty Trust Inc. (NYSE: DLR) is the fund's third-largest holding with a portfolio weighting of 4.32%. The company focuses on acquiring, developing and managing technology-related real estate for Fortune 1000 companies and financial services companies. The growth of cloud computing and wireless data has caused data center REITs such as Digital Realty Trust to outperform the other, more traditional REIT subsectors. The stock yields 3.98% and closed at $88.44 per share on March 16, 2016, right at the top of its preceding 52-week range.
Prologis Inc. (PLD)
Prologis Inc. (NYSE: PLD) is the fund's fourth-largest holding with a weighting of 4.13%. The company develops, owns, manages and leases industrial distribution and retail properties across the globe. Its board approved a 10.5% increase in the dividend payable March 31, 2016, bringing the current yield on the stock to 3.93%. Like the other REITS in the top five, it is near the top of its 52-week high of $45 per share, having closed at $42.75 per share on March 18, 2016.
Ventas Inc. (VTR)
Ventas Inc. (NYSE: VTR) carries a weighting of 3.97% in the fund's portfolio. The company focuses on the health care segment of the REIT industry through investment, management, financing and leasing of hospitals, senior housing, medical offices, skilled nursing facilities and other health care-related facilities. The stock yields 4.78% and closed at $61.85 per share on March 16, 2016. Its high for the past year was $67 per share.