Why there is no mutual fund with only REITs and when can we expect thata

General
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Why there is no mutual fund with only REITs and when can we expect thata

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Because there will be very few people interested in buying a MF which only invests in REIT.
So I don’t think it makes sense for any fund house to start a fund for such niche requirement.

Besides, REIT are classified as equity instrument now, so fund with only REIT will be an equity fund and most fund houses already have an equity fund. So I doubt they will be in position to offer another.

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I mean REITs create a messy taxation for individuals with bunch of different sources increasing burden of compliance. And with REIT classified as equity, all taxation via MF route will now be capital gains only. It makes sense to start a pure REIT fund just for that simple advantage.

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For investors yes, for AMC no.
As per SEBI directive, mutual funds are only allowed to offer only one fund per category. I think there are around 9-10 sub-categories in Equity (like large cap, midcap, flexi cap … etc.) and most fund houses already have a fund in each category.

So to start a pure REIT fund, they will have to close one of their equity fund or convert it. I am not sure how much appetite a fund house will have to close or convert and existing equity fund into REIT only fund. And I doubt it will gather enough AUM to justify the move.

Maybe a new fund house can do it to garner attention, but for most of the big fund houses, this will be really difficult.

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There has been recent proposals to allow 2 funds per category. Otherwise, “thematic” seems like a valid option.

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Just realised SEBI does not allow MF scheme to hold more than 10% asset in single Stock. So Unless there are more than 10 listed REITs, pure play REIT fund is not starter.

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Is that so? How does NIFTY ETFs operate then? https://archives.nseindia.com/content/indices/ind_nifty50.pdf

Apparently HDFC has 11% weight

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yeah that restriction is only for active funds, so technically an index fund or ETF could do it.

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We have Nifty REIT & INvits index fund . MF house should replicate this.

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We do have an index, but no fund yet.
Also INVIT is totally different from REIT, and has different return profile compared to REIT.

A REIT+INVIT index fund would have even less investor interest compared to REIT only index fund.

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What about this index - Nifty REITs & Realty .

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This funds represents real estate in India

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Good news . We will soon get a new mutual fund that simplifies the way we invest in real estate - Edelweiss Mutual Fund files offer document for Nifty REITs & Realty Index Fund | InvestOnline.in

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https://www.sebi.gov.in/filings/mutual-funds/jul-2026/edelweiss-nifty-reits-and-realty-index-fund_102753.html

Strangely says nothing about taxation or expense ratio. Just gives the entire tax summary and nothing specific for this fund