5 Best REIT Mutual Funds for 2026 and How to Invest

The Baron Real Estate Fund (BREFX +0.44%) owns a diversified portfolio of real estate businesses. It focuses on companies with growth potential, including REITs, homebuilders, and others that benefit from the real estate sector’s growth.

As of mid-2026, the fund had about $2.3 billion in net assets invested across 45 companies, led by the following five:

Two of the mutual fund’s top five holdings are REITs. Meanwhile, it has meaningful overall exposure to the sector. Data center REITs comprise 9.3% of its assets, healthcare REITs 7.0%, retail REITs 5.4%, industrial REITs 3.1%, and self-storage REITs 2.7%. Most of its other holdings own significant real estate, while 34.4% of its assets are companies focused on real estate.

One thing that stands out about the Baron Real Estate Fund is its performance. Over the past decade, the fund has delivered an average annualized return of 11.5%, significantly outpacing the MSCI U.S. REIT Index’s 4.8% annualized return. The fund also has a four-star rating from Morningstar (NYSE:MORN).

The only potential negative is its expense ratio of 1.32%, which is a bit high for a mutual fund. However, given its long track record of outperformance, it could be worth the price.