- NSE Indices launched a new index that will track the overall performances of listed real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
- The weights of securities in the index will be determined by their free-float market capitalisation, with the exposure to a particular REIT or InvIT being capped at 33 per cent.
- Also, the aggregate weight of the top-three securities is capped at 72 per cent.
- At present, there are six securities in the index, with Embassy Office Parks Reit having the highest weightage at 33 per cent.
- Powergrid Infrastructure Investment has the second highest weight, at 20 per cent.
- The index aims to track the performance of REITs and InvITs that are publicly listed and traded on the NSE.
- It is a company that owns, operates, or finances income-generating real estate.
- Most of them are publicly traded like stocks, which makes them highly liquid (unlike physical real estate investments).
- It is modelled after mutual funds; REITs pool the capital of numerous investors.
- This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.
- These are mutual fund-like institutions that enable investments into the infrastructure sector by pooling small sums of money from a multitude of individual investors for directly investing in infrastructure
- These are set up as a trust and registered with SEBI.
- An InvIT has 4 parties Trustee, Sponsor(s) and Investment Manager and Project Manager.