A real estate mutual fund’s (REMF) purpose is to invest directly or indirectly in real estate. A REMF moreover functions like any other mutual fund. It gathers funds from investors and put in them in real estate. It will be administrated by the provisions and guidelines under the SEBI (Mutual Funds) Regulations 1996.
Housing and real estate comprise a substantive portion of national wealth. This sector is also speedily growing in the economy. The concept of REMF is quite popular and well-known in developed markets. This is a new concept here and a lot of financial and fund houses have shown an interest in launching a REMF here.
These funds invest although the real estate investment trust (REIT). A REIT owns and manages real estate properties like shopping complexes, apartment complexes, office complexes, hotels etc. REMFs will provide ample capital for developing infrastructure by channeling small investments into the construction sector.
