As National Stocks Exchange subsidiary NSE Indices introduces the first REITs and InvITs index to track 6 securities, there is excitement among investors. The index will follow the performance of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) that are publicly listed or traded on the National Stock Exchange.
REITs are investment trusts (similar to mutual funds) that hold and manage real estate properties to provide regular income and capital appreciation. InvITs are similar to REITs in that they pool money and utilize it to own and operate functional infrastructure assets such as motorways, roads, pipelines, warehouses, and power plants.
The Nifty REITs and InvITs Index has a base value of 1000 and a base date of July 1, 2019. It will be examined and rebalanced every three months.
The index is divided into three sectors: real estate, power, and services. The real estate sector is the most weighted, accounting for 57.52% of the index, followed by electricity (35.61%), and services (6.87%).
The proportions of securities in the index will be defined by their free-float market cap. Moreover, the aggregate weight of the top three securities is limited to 72%.
The index currently contains six stocks, with Embassy Office Parks REIT having the largest weightage (33%) followed by Powergrid Infrastructure Investment with a weight of 20%. Mindspace Business Parks REIT comes in third position with 15.35%, followed by India Grid Trust with 15.34%, Brookfield India Real Estate Trust with 9.22%, and IRB INVIT Fund with 6.87%.
According to NSE statistics, the Nifty REITs and InvITs Index’s price return has been -4.13% QTD and the total return has been -2.17% QTD. The one-year price return has been -8.97%, with a total return of -1.74% for the year.
As NSE Indices introduces the first REITs and InvITs index to track 6 securities, it will assist to raise awareness and attract new investors. The index’s debut will make it easier for investors to assess the performance of these relatively new investment vehicles.
Source: NSE Press Release
