Why mutual funds are increasing their bets on REITs and InvITs
June 04, 2026
Portfolio disclosures from Ace Mutual Fund show that several multi-asset funds have either increased or maintained meaningful exposure to REITs and InvITs over the past year, highlighting fund managers' growing comfort with these alternative asset classes.
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are steadily finding a larger place in mutual fund portfolios, particularly among multi-asset allocation schemes looking to diversify beyond traditional investments such as equities, debt and gold.
Portfolio disclosures from Ace Mutual Fund show that several multi-asset funds have either increased or maintained meaningful exposure to REITs and InvITs over the past year, highlighting fund managers' growing comfort with these alternative asset classes.
Multi Asset Allocation Fund is an open-ended hybrid mutual fund that must invest in at least three distinct asset classes, with a minimum of 10 percent allocation in each.
Among the notable movers, WhiteOak Capital Multi Asset Allocation Fund had the highest allocation to REITs and InvITs at 15.6 percent in April 2026, up sharply from 8.5 percent a year earlier.
360 ONE Multi Asset Allocation Fund increased its exposure to 4.1 percent from virtually nil, while Invesco India Multi Asset Allocation Fund raised its allocation to 3.5 percent from around 1 percent at the start of 2026.
Several established schemes have also maintained sizeable allocations. Aditya Birla Sun Life Multi Asset Allocation Fund allocated 4.7 percent of its portfolio to REITs and InvITs, up from 4.1 percent a year ago.
DSP Multi Asset Allocation Fund held nearly 5 percent in the segment, while UTI Multi Asset Allocation Fund maintained an allocation of over 4.2 percent.
REITs and InvITs provide exposure to income-generating assets such as commercial office spaces, warehouses, highways, power transmission networks and renewable energy projects. Unlike traditional stocks, these instruments generate regular cash flows from rent, toll collections or infrastructure usage charges, a portion of which is distributed to investors.
However, not all fund managers are increasing exposure. Quant Multi Asset Allocation Fund reduced its allocation to 0.57 percent from 4.3 percent a year earlier. Mahindra Manulife Multi Asset Allocation Fund lowered its exposure from 7.5 percent to 4.4 percent, while SBI Multi Asset Allocation Fund trimmed its allocation to around 4 percent from 5.5 percent.
The Securities and Exchange Board of India (SEBI) reclassified Real Estate Investment Trusts (REITs) as equity-related instruments from January 1, 2026 to facilitate greater participation by mutual funds and Specialized Investment Funds (SIFs). Infrastructure Investment Trusts (InvITs), however, will continue to be categorized as hybrid instruments.
As India's REIT and InvIT market continues to expand and new investment vehicles come to market, these instruments are likely to play a growing role in how multi-asset funds seek diversification, income and long-term portfolio stability.