India’s First REIT Index Fund Set to Launch in August 2026
India’s first REIT index fund is set to launch in August, offering investors a unique opportunity to diversify their portfolios and tap into the growing real estate market. The Edelweiss Nifty REITs & Realty Index Fund, launched by Edelweiss Mutual Fund, is the first of its kind in India and is expected to provide investors with a tax-efficient route to investing in REITs.
Understanding the Nifty REITs and Realty Index
The Nifty REITs and Realty Index is a benchmark index that tracks the performance of 15 stocks comprising REITs and real estate stocks. The index has a 60% weightage of the five listed REITs and a 40% weightage of the 10 real estate stocks. The weight of each security in the index is based on free float market capitalisation, subject to a cap of 15%. The index 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.
Top Constituents of the Index
- 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%
Market Impact and Details
The Edelweiss Nifty REITs & Realty Index Fund will provide investors with exposure to a diversified basket of listed REITs and real estate companies. As more REITs get listed and are included in the index, investors will gain broader and more diversified exposure to REITs.
The fund will be launched in August 2026, and 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.
The 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.
The REITs offer a pre-tax yield of 5-7%, and there is room for growth, along with providing a steady income to investors. The fund will be managed by Edelweiss Mutual Fund, a reputable and experienced fund manager.
Calendar Year Performance
The calendar year performance of the Nifty REITs and Realty Index as compared to the Nifty Realty Index and REITs is as follows:
- 2021 (Jul – Dec) – 25.20%
- 2022 – 1.00%
- 2023 – 28.90%
- 2024 – 25.50%
- 2025 – 9.10%
- 2026 (Till 23rd July) – 4.50%
Key Takeaways
- The Edelweiss Nifty REITs & Realty Index Fund is the first REIT index fund in India, offering investors a unique opportunity to diversify their portfolios and tap into the growing real estate market.
- The fund will provide investors with exposure to a diversified basket of listed REITs and real estate companies, with quarterly rebalancing, in a tax-efficient manner.
- The fund will be launched in August 2026, and the New Fund Offering (NFO) will be open from 5 to 19 August 2026.
FAQs
What is the investment objective of the Edelweiss Nifty REITs & Realty Index Fund?
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.
What are the benefits of investing in the Edelweiss Nifty REITs & Realty Index Fund?
The fund provides investors with various benefits, such as access to real estate at low cost, diversification, and liquidity.
What is the tax impact of investing in the Edelweiss Nifty REITs & Realty Index Fund?
The capital gains on a REIT fund will be taxed as follows: short-term capital gains (STCG) are taxed at 20%, and long-term capital gains (LTCG) are taxed at 12.5% (without indexation benefits).
Conclusion
The Edelweiss Nifty REITs & Realty Index Fund is a unique opportunity for investors to tap into the growing real estate market in India. The fund provides investors with exposure to a diversified basket of listed REITs and real estate companies, with quarterly rebalancing, in a tax-efficient manner. We recommend that investors consider investing in this fund as part of their overall investment portfolio.
