Securities and Exchange Board of India and the Association of Mutual Funds In India are working together to form guidelines and regulations for real estate funds.
"This would pave the way for fund houses to launch schemes for investing in the real estate sector," AMFI Chairman A P Kurian said.
Talking to reporters on the sidelines of a conference in Mumbai on Wednesday, he said since there were many factors to it, this would take time for the market regulator to come out with final guidelines.
Since real estate, like gold, is not a security, Sebi regulations had to be amended before allowing mutual funds to launch real estate scheme.
However, he did not mention any time-frame. "Yield from the real estate sector often outstrips the return from the stock market. The initiative is intended to benefit small investors," Kurian added.
Kurian said mutual fund schemes for real estate sector were very popular in the US, Hong Kong, Japan, Taiwan and Singapore and these should receive good response from India as well.
The booming real estate sector in the country which is gasping for fund infusion is likely to be benefitted once the Sebi regulations come into effect allowing fund houses to invest in the real estate sector.
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