Real Estate Mutual Funds

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Abstract:

The Real Estate Mutual Funds cater to the need for the investments in the real estate sector. The REMF are mutual funds, which are used to raise money for real estate sector projects.

Real Estate Mutual Funds (REMF) are mutual funds used for the purpose of investment in the real estate property, either directly or indirectly. The guidelines and provisions pertaining to the Real Estate Mutual Funds are provided by the Securities Exchange Board of India (SEBI), under the Mutual Funds Regulations, 1996.

The Real Estate Mutual Funds are structured to be close-ended and net asset value (NAV) of the scheme of the Real Estate Mutual Funds is to be announced regularly.

Real Estate Mutual Funds - Overview

The introduction of the Real Estate Mutual Funds has caused a certain amount of stimulation in the real estate sector. The main objective of the Real Estate Mutual Funds is to raise funds for the expansion of the retail businesses by means of real estate development. The introduction of REMF would provide required capital for the development of retail infrastructure. Different national and international financial institutions are competing in the real estate market in India.

The REMF functions like any other mutual funds, but the difference lies in the modes of investment. In case of mutual funds the investment are made in common stock or bonds, but in case of Real Estate Mutual Funds the investments are made directly on development of property.

With the introduction of the Real Estate Mutual Funds, the constructors are looking at quality standards as the foremost parameters. These funds would acquire real estate assets by means of aiming at the developing markets. The Real Estate Mutual Funds is expected to enhance the quality of the housing projects.

Real Estate Mutual Funds - Prominent Players

HDFC Property Fund
Kshitij Venture Capital Fund (A group venture of Pantaloon Retail India Ltd)
DHFL Venture Capital Fund
Kotak Mahindra Realty Fund
India Advantage Fund (ICICI)


Last Updated 06/30/2011

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