S&P Expects 'Market Performance' from Realty Funds.

Standard & Poor's is expecting a "market performance" year from real estate mutual funds in 2004, after the group turned in a 36.6% return for 2003.

The financial information services company also expects real estate investment trusts, in which real estate mutual funds generally invest, to turn in a 11% return for 2004.

According to Standard & Poor's, real estate funds became popular during the bear market and "stayed in fashion" last year as other funds recovered.

But looking ahead, S&P expects that the REIT sector will provide 2004 results that are "decent," but less rewarding than year ago results.

For the five years ended December 2003, real estate mutual funds turned in 14.20% on average vs. 3% for domestic stock funds, S&P reports. During the same period, the S&P 500 index returned a negative 4.10%.

Raymond Mathis, a Standard & Poor's REIT equity analyst, said, "I'm looking for market performance this year. When the tech bubble burst in 2000, investors were attracted to dividends on REITs. At the same time, people who had been enamored of Internet stocks began focusing on companies with 'hard assets' that offered ...