REITs and InvITs help in diversification but watch out for the pitfalls if investing

Synopsis
Since 90% of the income is distributed to investors, return from these instruments will come mostly from interest or dividends. Checking distribution yield and comparing it with prevailing interest rates can be the best way to assess valuation.

The government plans to utilise real estate investment trusts (Reits) and infrastructure investment trusts (Invits) in a big way to divert funds towards construction and infrastructure projects. Investor interest in these new generation instruments is high due to the prevailing interest rate structure. “Choices are limited for fixed income investors due to the low interest rate environment and Reits can be a good option now,” says Sharad

Narendra Nathan

ET Bureau

6 mins read, Last Updated:

Mar 1, 2021, 10:14 AM IST

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REITs and InvITs help in diversification but watch out for the pitfalls if investing

Synopsis
Since 90% of the income is distributed to investors, return from these instruments will come mostly from interest or dividends. Checking distribution yield and comparing it with prevailing interest rates can be the best way to assess valuation.

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REITs and InvITs help in diversification but watch out for the pitfalls if investing

SynopsisSince 90% of the income is distributed to investors, return from these instruments will come mostly from interest or dividends. Checking distribution yield and comparing it with prevailing interest rates can be the best way to assess valuation.

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Synopsis
Since 90% of the income is distributed to investors, return from these instruments will come mostly from interest or dividends. Checking distribution yield and comparing it with prevailing interest rates can be the best way to assess valuation.