Various fund houses have their plans to make their investments in the segment of Infrastructure Investment Trusts (InvIT) and Real Estate Investment Trusts (REIT). Now, funds have the liberty to invest as much as 5% of the total asset value in different securities. In case there is just one fund, then the investment amount is 10%. The key modification in the system of investment is an elementary change in the scheme features and this is the most probable reason why various fund houses are seeking investors to either give consent to their agreement or quit the investment.
What are REITs?
REITs are those companies which are the owners of and rent out residential or commercial segments of real estate. The income generated via rent-out process is shared among the investors of REIT according to the units that have been allotted to them. These units are negotiable while exchanging.
What are InvITs?
InvITs are just like REIT, however, the only difference being that they are the owners of just infrastructure and not the real estate.
Looking at the current scenario where the returns are becoming quite less, being acquainted with these investment instruments can improve the return profile of a fund.These instruments are new and untried and thus, can lead to the issue regarding liquidity.
If the investors wish to quit the scheme they can easily do so within the scope given by the fund house and without paying any quitting charge. Moreover, they have the liberty to shift to another scheme within the same fund house.