India’s first REIT index fund
to launch in August: Should you invest in it?
1 Aug 2026
The Nifty REITs and Realty Index
tracks the performance of 15 stocks comprising REITs and real estate stocks.
AI Quick Read
In the last one year, while the
Nifty 50 Index has delivered a negative return of around -2% (as of 30 July),
the individual REITs have done well. The individual REITs have delivered
returns ranging from 8% to 19%, depending on which individual REIT an investor
bought. However, an individual needs to have the expertise to select which REIT
to invest in. Also, if an individual wished to invest in a basket of REITs, no
mutual fund scheme was available.
However, this will change with
the launch of India's first REIT index fund in August. In this article, we will
explore what the REIT index fund has to offer and whether you should invest in
it.
Nifty REITs and Realty Index
Before we look at the mutual fund
offering, let us understand the Nifty REITs and Realty Index, which is the
benchmark index for the mutual fund scheme. The Nifty REITs and Realty Index
tracks the performance of 15 stocks comprising REITs and real estate stocks.
The five listed REITs have a 60% weightage, and the 10 real estate stocks have
a 40% weightage. As more REITs get listed and included in the index, their
cumulative weightage will increase and eventually reach 100%.
The weight of each security in the index is based on free float market capitalisation, subject to a cap of 15%. It is reconstituted and rebalanced quarterly. The index has delivered a total return of 5.03% over the last one year, a 19.10% CAGR in the last three years, and 17.58% CAGR since its inception (1 July 2021). The index provides a 3.35% dividend yield. The top 10 constituents of the index are as follows.
|
Company’s
name |
Weight |
|
Brookfield India Real Estate Trust |
15.99% |
|
Embassy Office Parks REIT |
15.11% |
|
Nexus Select Trust |
13.87% |
|
Knowledge Realty Trust |
7.92% |
|
DLF Ltd. |
7.69% |
|
Mindspace Business Parks REIT |
7.40% |
|
Phoenix Mills Ltd. |
7.03% |
|
Lodha Developers Ltd. |
5.12% |
|
Prestige Estates Projects Ltd. |
5.10% |
|
Godrej Properties Ltd. |
4.88% |
Note: The above data is as of 30
June 2026.
Edelweiss Nifty REITs &
Realty Index Fund
Edelweiss Mutual Fund will be
launching the Edelweiss Nifty REITs & Realty Index Fund in August 2026. It
is India’s first REIT index fund. The New Fund Offering (NFO) will be open from
5 to 19 August 2026. The investment objective of the scheme is to generate
returns that are in line with the performance of the Nifty REITs & Realty
Total Return Index, subject to tracking errors.
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A REIT mutual fund provides
investors with various benefits, such as access to real estate at low cost,
diversification, and liquidity. In India, as of July 2026, there are only six
listed REITs with a $19 billion market capitalisation
compared to 196 listed REITs in the US with a $1.42 trillion market capitalisation. In the future, as more REITs get listed in
India, they will get included in the Nifty REITs & Realty Index. The mutual
fund investor will get exposure to them through the index fund.
As per the Edelweiss MF presentation, the six listed REITs in India own commercial properties worth ₹3.1 lakh crore (GAV – Gross Asset Value). However, their market capitalisation is only ₹2.1 lakh crore, which is a 32% discount to the GAV. The REITs offer a pre-tax yield of 5-7%. So, there is room for growth, along with providing a steady income to investors.
Let us
now look at the calendar year performance of the Nifty REITs and Realty Index
as compared to the Nifty Realty Index and REITs.
|
|
Nifty
REITs and Realty Index |
Nifty
Realty Index |
REITs
(Total Returns) |
|
2021 (Jul – Dec) |
25.20% |
41.60% |
12.00% |
|
2022 |
1.00% |
-10.50% |
6.10% |
|
2023 |
28.90% |
82.00% |
6.80% |
|
2024 |
25.50% |
34.80% |
18.60% |
|
2025 |
9.10% |
-16.30% |
32.60% |
|
2026 (Till 23rd July) |
4.50% |
1.10% |
5.40% |