The National Stock Exchange (NSE) Indices have recently launched the first-ever Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index in India. The aim of this index is to track the performance of REITs and InvITs that are listed and traded on the NSE. This article will discuss the salient features of the REITs and InvITs index, the advantages of investing in REITs and InvITs, and the top constituents of the Nifty REITs and InvITs index.
Salient features of the REITs and InvITs index:
The REITs and InvITs index will be reviewed and rebalanced quarterly, and the weight of the index is based on free-float market capitalization. The base date is July 1, 2019, and has a base value of 1000. The index has a security cap of 33% each, and the total aggregate weight of the top three securities is capped at 72%. The REITs invest in real estate projects, while InvITs invest in infrastructure projects with a long gestation period.
Advantages of investing in REITs and InvITs:
Investing in REITs and InvITs has many advantages.
Firstly, they provide investors with an opportunity to diversify their portfolios by including revenue-generating real estate and infrastructure assets.
Secondly, investing in REITs and InvITs helps to diversify risk from regular asset classes like equity, debt, and gold.
Thirdly, REITs and InvITs are famous among investors globally and are new to India, which can be utilized by mutual funds.
Fourthly, mutual funds based on the REITs and InvITs index can be a good option for investors to diversify their portfolio rather than invest in single REITs and InvITs.
Top constituents of the Nifty REITs and InvITs index:
The top constituents of the Nifty REITs and InvITs index are Embassy Office Parks REIT with a weight of 32.9%, Powergrid Infrastructure Investment with a weight of 20.2%, Mindspace Business Parks REIT with a weight of 15.3%, and India Grid Trust with a weight of 15.3%.
Why In News
The National Stock Exchange (NSE) Indices have launched the first-ever Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index in India, tracking the performance of these listed and traded assets. This move reflects the growing importance of REITs and InvITs in India’s economy, providing investors with a new avenue for diversification and investment opportunities.
MCQs about India’s First-ever REITs and InvITs Index
-
What is the aim of the REITs and InvITs index launched by the National Stock Exchange in India?
A. To track the performance of all listed and traded stocks on the NSE
B. To track the performance of revenue-generating real estate and infrastructure assets listed and traded on the NSE
C. To track the performance of all mutual funds investing in REITs and InvITs
D. To track the performance of all newly listed and traded stocks on the NSE
-
When is the REITs and InvITs index reviewed and rebalanced?
A. Monthly
B. Quarterly
C. Annually
D. Bi-annually
-
What is the maximum weight cap for each security in the REITs and InvITs index?
A. 20%
B. 33%
C. 50%
D. 72%
-
Which of the following is not an advantage of investing in REITs and InvITs?
A. Diversifying portfolios by including revenue-generating real estate and infrastructure assets
B. Diversifying risk from regular asset classes like equity, debt, and gold
C. Being famous among investors globally
D. Being a new investment option for mutual funds in India
Boost up your confidence by appearing our Weekly Current Affairs Multiple Choice Questions
