New York ? Individuals “flipping” homes to make a quick buck are getting the newspaper headlines these days, but the mutual fund investor who is focused on the real-estate sector isn’t doing too shabby either.

Real-estate sector equity funds were the best performing objective in the second quarter, according to preliminary data from mutual-fund tracker Lipper Inc.

The double-digit returns from the real estate sector were the best in a generally positive quarter for mutual funds.

Overall, most equity fund sectors were on track to finish with slight gains for the three months ended June 30, with growth funds obtaining slightly better results than value and core funds. Nevertheless, many sectors were basically flat for the year after a lackluster first three months of 2005.

Sector funds did significantly better this quarter, with real estate leading the way. Utility, health/biotech and telecommunications fund objectives also did well.

How long real estate will stay on top could very well be determined by moves by the Federal Reserve, which hiked interest rates for a ninth time June 30.

Despite a string of interest rate increases over the past 12 months, long-term rates have headed in the opposite direction, with the 10-year note hovering around 4 percent at quarter’s end and 30-year mortgage rate well below 6 percent.

For now, however, mutual fund investors are basking in the glow of a strong housing market. With this quarter’s strong performance, real estate funds have generated returns of roughly 30 percent over the past 12 months.

Elsewhere, Latin American, emerging market and China region funds were among the best performing world equity funds, which in general were slightly higher for the quarter.

Fixed income funds, whether domestic or international, were on track to have a small gain for the quarter.