The Twenty: Investor Guide
Index funds and real estate funds are both compelling investments. Here’s how they compare.
Index funds offer broad market exposure and liquidity, but they also have limits. Returns are tied to market performance, and investors cannot outperform the benchmark. For accredited investors seeking portfolio diversification, passive income, and higher potential returns, private real estate funds like those from DLP Capital could provide compelling advantages.
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With over 20 years of work trying to solve the affordable housing crisis and creating wealth and prosperity for our partners and investors, DLP Capital is creating housing, jobs, and prosperity for families across America—and we’re just getting started.
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See how DLP Capital evolved from a small Pennsylvania startup into one of the fastest-growing private companies in America by focusing on a singular problem: the workforce housing crisis.
Common questions about comparing Index vs. real estate funds.
The 7% rule in real estate states that a real estate investment, whether a fund, syndication, or individual property, should target an annualized pre-tax return of at least 7% over its lifetime. DLP Capital-sponsored funds are structured to aim for targeted returns at—or above—this benchmark.
Both real estate and the S&P 500 can be a good investment, and which is “better” for you will depend on your time horizon, liquidity needs, risk tolerance, and return expectations. If you need liquidity and can stomach significant ongoing volatility, the S&P 500 may be right for you. On the other hand, if you’re willing to trade liquidity for a potentially smoother and less-volatile return stream, real estate could be a good fit.
Neither index funds nor real estate funds are inherently better—it depends on your financial goals, time horizon, and risk tolerance. Index funds are liquid and track market performance, while DLP Capital-sponsored funds offer private market opportunities, income potential, and diversification unavailable in public markets.
Both investments offer potential benefits; the best choice will depend on personal factors. Mutual funds are highly liquid, accessible to all, and track market performance. Real estate funds can potentially offer accredited investors access to higher returns, but are often less liquid.
"The personal side of it is how do you emotionally connect to your money? If you're very, very in tune with the ups and downs and you're okay with public markets going up, 50% and down 100% the next day, maybe that's right for you. It's not right for everybody... What you generally tend to see in private real estate investments is less correlation to public markets, and more correlation to steady, consistent returns."
-Brett Horlacher, Senior Director of Investor Success | DLP Capital
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