India's First-ever REITs and InvITs Index [UPSC Current Affairs]

NSE Indices have launched Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index which is the first ever in India. In this article, you can learn more about the India’s First-ever REITs and InvITs Index for the IAS exam economy section.

REITs and InvITs Index:

• The aim of the new index is to track the performance of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) which are listed and traded on the NSE.
• REITs invest in real estate projects and  InvITs invest in infrastructure projects with a long gestation period. 
• The index will be reviewed and rebalanced on a quarterly basis and the weight of the index is based on free-float market capitalization. The base date is the first of July 2019 and has a base value of 1000.
• There is a security cap of 33% each and the total aggregate weight of the top 3 securities is capped at 72%. 
• Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) compose revenue-generating real estate and infrastructure assets respectively.
• The Reits and InviTs are good options for investors to diversify their portfolios to include revenue-generating real estate and infrastructure assets.
• The  Reits and InviTs also help to diversify risk from regular asset classes like equity, debt and gold.
• REITs and Invits are famous among investors globally and are new to India which can be utilized by mutual funds.
• Mutual funds based on the REITs and InvITs index can be a good option for investors to diversify their portfolio rather than invest in single REITs and InvITs.
• The top constituents of the Nifty REITs and InvITs index are 

• • Embassy office parks Reit (32.9% weight)
  • Powergrid Infrastructure Investment (20.2%)
  • Mindspace Business Parks Reit (15.3%)
  • India Grid Trust (15.3%).         

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