Some things make the Reserve Bank of India (RBI) paranoid. The invasion of foreign money in the Indian property market has always been a familiar theme that rang alarm bells on Mint Street — the central bank’s headquarters.
Whenever it sensed an alarm, the regulator moved in to clamp down on such money flows. Even foreign venture capital funds opening shops here are asked by RBI to give an undertaking that the money they raise will not go into real estate. Read More
Seven years after the proposal was first mooted, the Securities and Exchange Board of India (Sebi) came out with its draft guidelines for real estate mutual funds (MFs). This move has brought much joy and relief to the MF industry. Now, the industry is out to convince domestic investors that the move could not have come at a more opportune time. In these volatile times, real estate acts as a good diversification option due to its low correlation with equity and bonds. Besides, retail investors can now invest in actual real estate projects with amounts as low as a few thousand rupees.
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SEBI has allowed mutual funds to launch real estate mutual fund (REMF) schemes, a move that will encourage investors to participate in and benefit from the real estate boom. Existing MFs can launch the REMF schemes, provided “…they have adequate number of experienced key personnel/directors,” Securities and Exchange Board of India (SEBI) said in a notification.
Market regulator Securities and Exchange Board of India (SEBI) said on 11th April it would issue rules on Real Estate Mutual Funds in the next fifteen days, allowing retail investor as well to access the realty market, which has viewed a boom in the last few years. “SEBI is ready with rules on real estate MFs that could be issued any day.T C Nair told the outer time limit to issue guidelines is fifteen days.
The SBI Mutual Fund filed the offer document with the Securities and Exchange Board of India (Sebi) for launching a dedicated scheme for the real estate and related sector, on 13th march .
The purpose of Magnum Sector Funds Umbrella (MSFU) Real Estate Equity Fund is to offer investors opportunities for long-term growth in capital through an active management of investments in equity and equity-related instruments (including derivatives) of companies in the realty and similar sectors and in debt and money market instruments, the offer document said.
The open-ended scheme would be available in Retail and Institutional Plan with growth and dividend options.
Under the dividend option, facility for reinvestment and payout of dividend is available, it said. Minimum investment under the retail plan is Rs 5,000 while under the institutional plan, it is Rs 5 crore. The performance of the scheme will be benchmarked against a composite benchmark created using BSE Realty Index to the extent of 60 per cent of the portfolio and BSE 100 for the remainder 40 per cent.
