On 9th june(today), Stock markets opened lower and BSE benchmark Sensex dropped below 15,000. Real Estate, Banking and Metal stocks were among worst hit. Real estate major DLF touched its lifetime low in today’s trading session. At 1.30 pm, BSE Sensex was down by 519 points at 15,053.

ITC, RCom, Reliance Industries, L&T and ONGC were among major losers. Tata Motors, Tata Steel and TCS were trading lower compared to Friday’s close. ICICI Bank, HDFC Bank, HDFC and SBI were trading much lower compared to earlier close.

Ranbaxy Labs was the only stock among heavyweights trading in positive zone. Technology stocks were trading marginally lower.

Global markets are also weak due to slowdown in economic growth and higher oil prices. US unemployment data hit investor sentiment and Dow Jones closed lower last week.

The fund not only took the crash in its stride, but also delivered positive returns over the same time period. If you had invested Rs 10,000 separately in the BSE Sensex, BSE Realty index and ING Global Real Estate Fund on January 10, ’08, your investment would be worth Rs 7,900, Rs 5,500 and Rs 10,800, respectively, as on April 22, ’08. Sebi has given approval to two kinds of real estate funds. The first category is of real estate MFs, which will invest in real estate projects and mortgage-backed securities.

These will be closed-ended funds, listed on the exchanges. As their net asset values (NAVs) will be declared daily, investors will have the option to exit any day. So, you can now say goodbye to the old tradition of illiquidity in real estate investments. Real estate investment trusts (REITs, in short) constitute the second category of real estate funds. These products are very popular abroad. The most common version of this class of funds allows an investor to earn fixed income like returns through rents of commercial properties . Most REITs are listed on the exchanges and have tax incentives for investors.

Put simply, REITs work like fixed income instruments (rents as coupons), while realty MFs will seek capital appreciation (like a stock price going up) by investing in properties. For years, real estate was synonymous with lack of transparency in transactions and absence of an index, making it difficult to track prices. Various fund officials like ING’s Mr Vohra hope that the introduction of REITs in India will change all that. They are betting on such products ushering in greater liquidity to this asset class, as well as freeing up developer capital for further investment, changing the dynamics of the sector as well.

With the current real estate boom and no signs of any fall in demand for homes or offices, this may be the best time for investors to own a share of the lucrative realty sector. Real estate MFs and REITs offer the cheapest and most convenient way to do so. However, let’s hope that smoother legislative framework and a clear taxation policy will be put in place for these products, making them investor-friendly.