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Just a few months ago, we and the entire capital market touted investment in real estate. Real estate companies were buying foreign properties at a dizzying pace, borrowing billions of dollars, sniffing at everything under the sun - and their stocks generated phenomenal yields. The public, in turn, rushed to invest in mutual funds that targeted real estate, and talked about the returns they made over Friday night dinner. Real estate was the sector, the darling of the capital market for two years. Today, the circumstances have changed.

In early May 2007, we examined the performance of public real estate mutual funds during the boom period dating to the beginning of 2006 - a period of 16 months. Migdal Dikla Real Estate was in first place with a yield of 37 percent, followed by Africa Real Estate, Helman Real Estate Infrastructures, KZI Real Estate, and a second Migdal fund - Dikla Active Real Estate - completed the top five.

But how things change! Since the beginning of May, the Tel Aviv Real Estate 15 index has lost 23 percent of its value in its longest continuous fall in years, and the performance of the top funds had changed drastically. We took another look at the TASE lists and examined which funds had the highest yields - or, more accurately, which funds had the smallest negative yields.

While this may be too brief a period to measure the yields of mutual funds precisely, it can certainly give us an indication of the ability of funds to demonstrate performance in a bear market - an achievement that is no less important than experiencing a positive yield in a bull market.

The best yield during this period was achieved by the Sprint Real Estate and Infrastructures mutual fund - the same fund that, at the end of April, lagged behind almost every other, with a yield of 20 percent. During the subsequent period, however, this fund achieved the smallest loss: 9.5 percent.

In second place was Africa Real Estate with a negative return of 10.2 percent; Pia Real Estate with a negative return of 10.3 percent; and both Ilanot Real Estate and Migdal Dikla Active, which have fallen 10.8 percent and share fourth place.

Migdal suddenly has only one representative among the top five, after Migdal Dikla Real Estate fell 13.4 percent, to fourth from the bottom. Worse are KZI Real Estate, with a negative yield of 14.6 percent; Prisma Real Estate, with a negative yield of 16.4 percent; and Apex Real Estate and Infrastructures, with a negative yield of 19.8 percent performed worse.

The dismal yield by the Apex Real Estate mutual fund in recent months is due to in part to the collapse of Heftsiba Building Development & Investments, which worsened the fund's showing from a positive 7.4 percent for the first four months of the year - at a time when its competitors achieved yields of between 3.4 percent (Ramco Real Estate and Infrastructures), to 21.9 percent (Migdal Dikla Active).

This deterioration apparently caused Apex to undertake a measure that investors and the rating agencies do not care for: It changed the name and policy of the mutual fund. From Apex Real Estate and Infrastructures to Apex Scandinavia Sweden. Furthermore, it became a mutual fund that invests in Scandinavia.

It must be admitted that these changes in the listings are not surprising. Yields tend to go hand in hand with risk. In other words, market volatility lifts the standard deviation that the risk represents. Slumps are liable to be more painful precisely in those funds that achieved high yields during the good times.

Why was Migdal Dikla ousted from top place recently (though it must be stated that its yield since the beginning of the year still leads almost unchallenged)? How did Sprint Real Estate fall by just half of the decrease in the Real Estate 15 index? The answers to these questions can be found in the compositions of the funds' assets, which are published, albeit with some delay, on the mutual funds Web site Funder.

Sprint Real Estate's six largest holdings are Ocif Investment and Development, Elbit Medical Imaging, Rilon, Hiron Trade Investments and Industrial Building, Ashtrom Properties, and Housing and Construction Holding. Only two of them have fallen: Ocif, controlled by Arcadi Gaydamak, which has fallen 24 percent; and Rilon, which has dipped by 12 percent. All the others rose during the past three months while the Real Estate 15 index was plummeting. Elbit Medical Imaging has risen 1.5 percent; Hiron, Ashtrom and Housing and Construction each rose by 20-25 percent.

In contrast, Migdal Dikla Real Estate paid for its large stock holdings: Gazit-Globe, which accounted for 7.7 percent of the fund at the end of May, has fallen 14 percent; and Africa-Israel Investments, the next largest, has fallen by 27 percent, dragging the mutual fund down.