India’s first REIT-based index fund opens for subscription: How it works

Edelweiss Mutual Fund has launched the Edelweiss Nifty REITs & Realty Index Fund, an open-ended index fund that will provide investors exposure to listed real estate investment trusts (REITs) and real estate companies through a single passive investment product.

The New Fund Offer (NFO) opens for subscription on August 5 and will close on August 19.

The fund will track the Nifty REITs & Realty Total Return Index (TRI), subject to tracking error. The index currently has a minimum 60% allocation towards listed REITs, while the remaining portion is invested in listed real estate companies. The allocation towards REITs can increase up to 100% as the number of eligible listed REITs expands, according to the fund house.

How will the Edelweiss Nifty REITs & Realty Index Fund work?

Unlike direct investment in commercial real estate, where investors typically need significant capital and face issues around liquidity and management, REITs allow investors to participate in income-generating real estate assets through exchange-listed units.

The new index fund combines exposure to REITs with listed real estate developers and related companies. While REITs provide access to commercial assets such as office spaces and other income-generating properties, real estate companies offer exposure to the growth potential of the broader real estate sector.

The underlying index follows a rules-based methodology and is reviewed quarterly to maintain diversified exposure across the listed real estate ecosystem.

Real estate sector growth drives interest in REITs

The launch comes amid growing interest in India’s real estate sector, supported by trends such as urbanisation, infrastructure development, expansion of Global Capability Centres (GCCs), and rising demand for commercial and logistics assets.

India’s REIT market has also expanded in recent years with more listed REITs, regulatory developments and increased investor participation. REITs are designed to provide investors with exposure to professionally managed real estate assets while offering liquidity through stock exchanges.What investors should know

The fund offers a passive route for investors looking to add real estate exposure without directly buying physical property. However, like other equity-oriented investments, returns will depend on the performance of the underlying REITs and real estate companies and may be affected by factors such as interest rates, commercial property demand and sector-specific risks.

The scheme will be managed by Bharat Lahoti and Manasi Jalgaonkar.

Radhika Gupta, Managing Director and CEO, Edelweiss Asset Management Company, said the fund aims to simplify access to real estate as an asset class by offering diversified exposure through a mutual fund structure.

The fund is suitable for investors seeking long-term capital appreciation through exposure to securities forming part of the Nifty REITs & Realty Total Return Index, subject to tracking error.