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Zacks

Is Cohen & Steers Realty Shares (CSRSX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Sector - Real Estate fund could think about starting with Cohen & Steers Realty Shares (CSRSX). CSRSX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes CSRSX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.

History of Fund/Manager

Cohen & Steers is based in New York, NY, and is the manager of CSRSX. The Cohen & Steers Realty Shares made its debut in July of 1991 and CSRSX has managed to accumulate roughly $3.74 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. CSRSX has a 5-year annualized total return of 8.7% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.21%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, CSRSX's standard deviation comes in at 12.59%, compared to the category average of 11.89%. The standard deviation of the fund over the past 5 years is 14.16% compared to the category average of 12.66%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. CSRSX lost 64.56% in the most recent bear market and underperformed its peer group by 0.66%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.

Investors should note that the fund has a 5-year beta of 0.62, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. CSRSX's 5-year performance has produced a positive alpha of 2.29, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, CSRSX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.22%. Looking at the fund from a cost perspective, CSRSX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $10,000 and that each subsequent investment needs to be at $500.

Bottom Line

Overall, Cohen & Steers Realty Shares ( CSRSX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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