NSE Indices launches India’s first-ever REITs and InvITs Index
The weights of securities within the index are based on their free-float market capitalization subject to a security cap of 33 per cent each and the aggregate weight of the top 3 securities is capped at 72 per cent, NSE added in their statement.
NSE Indices Limited on Tuesday launched India’s first-ever Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) Index - Nifty REITs & InvITs Index to track the performance of REITs and InvITs that are publicly listed and traded (listed and traded, or not listed but permitted to trade) at the National Stock Exchange.
The weights of securities within the index are based on their free-float market capitalization subject to a security cap of 33 per cent each and the aggregate weight of the top 3 securities is capped at 72 per cent, NSE added in their statement.
The Nifty REITs & InvITs Index has a base date of July 01, 2019, and a base value of 1000, as NSE mentioned in their press statement. It has been proposed that the index will be reviewed and rebalanced every quarter.
“REITs and InvITs are recognized as strong alternative financial instruments to raise funds against the cash generating infrastructure and real estate projects. For investors, these instruments provide exposure to real estate or infrastructure assets and offer diversification of risk from regular asset classes like equity, debt, and gold and generate regular income. The launch of the Nifty REITs & InvITs Index - India’s first ever REITs & InvITs Index aligns with NSE’s vision to provide market representative benchmarks for different asset classes. The Nifty REITs & InvITs Index will track the performance of publicly listed REITs & InvITs and act as a benchmark for active funds,” added Mukesh Agarwal, CEO, of NSE Indices.
What Are REITs And InvITs?
A real estate investment trust (REIT) or an infrastructure investment trust (InvIT) is an investment vehicle that owns revenue-generating real estate or infrastructure assets. REITs invest in real estate projects whereas InvITs invest in infrastructure projects with long gestation periods. Through REITs & InvITs investors get exposure to diversified regular income-generating real estate and infrastructure assets. They are mostly considered as a kind of hybrid securities, through which investors get to explore diversified regular income-generating real estate and infrastructure asset.
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