Types:

• Real Estate Investment Trusts (REITs): REITs are companies owning income-generating real estate. They offer liquidity, regular dividends, and diversified portfolios, traded on stock exchanges. Types include Equity REITs, Mortgage REITs, and Hybrid REITs.

• Infrastructure Investment Trusts (InvITs): InvITs pool investor money for infrastructure projects. They provide consistent income through dividends and interest. Types include Public InvITs (finished projects) and Private InvITs (projects under construction).

• Small and Medium REITs (SM REITs): SM REITs focus on smaller real estate assets (₹50-500 crores). They offer regulated, transparent access to rent-yielding properties, enhancing investor trust and fractional ownership opportunities.

Benefits:

• Potential for Higher Returns: Investment Trusts can offer attractive returns due to their diversified portfolios and professional management.

• Dividend Income: Many Investment Trusts pay regular dividends, providing a steady income stream for investors.

• Access to a Variety of Assets: Investors can gain exposure to a wide range of assets, including those that may be difficult to access individually.

Risks:

• Market Risk: The value of the trust's investments can fluctuate with market conditions, impacting the share price.

• Liquidity Risk: As closed-ended funds, the liquidity of Investment Trusts can be lower compared to open-ended funds, potentially making it harder to buy or sell shares quickly.

• Management Risk: The performance of the trust depends on the expertise and decisions of the fund managers.

Suitability:

Investment Trusts may be suitable for investors with a moderate to high-risk tolerance, looking for long-term capital growth and income. They are ideal for those seeking diversification and professional management of their investments.

Disclaimer : The information provided on this blog is for informational purposes only and should not be construed as financial advice.