Real estate goes mutual
India Real Estate Blog
Source: economictimes.com
Real estate funds globally have a huge potential market and India being a growing domestic market, real estate funds are the new route for investments . In a significant move, the Securities and Exchange Board of India (SEBI) has approved guidelines for real estate mutual funds (REMF).
An REMF scheme means a scheme of a mutual fund which has the investment objective to invest directly or indirectly in real estate property . The scheme will be governed by the provisions and guidelines under SEBI (mutual funds) regulations. The structure of the REMFs, initially, will be close-ended and the units of REMFs will be compulsorily listed on the stock exchanges and Indian real estate market.
According to analysts, this is a welcome development for the mutual fund industry which enables common investors to participate in real estate. These funds are akin to other mutual funds, with the main difference being that the underlying asset to be invested in is real estate.
Thus, the investors do not need to shell out huge sums of money to dabble in the real estate market. They can enjoy the high wave in the realty sector, by just investing small sums of money. Also, these funds are a great help because of the illiquid nature of real estate investments .
At the same time, tradability issues would be a concern NAV of the scheme will be declared daily.
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