Kotak Mutual Fund has filed a scheme information document with the market regulator for Kotak International REIT Fund. If SEBI approves it, this would be the first REIT fund available for Indian investors.
Kotak International REIT Fund is an open-ended fund-of-funds scheme investing in units of SMAM ASIA REIT Sub Trust fund and/or other similar overseas funds.
The fund is suitable for investors who are seeking long-term capital growth and long-term capital appreciation and income, the document said. The fund will invest at least 95 per cent of its net assets for investment in units/share class of SMAM ASIA REIT Sub Trust and/or other similar overseas funds, while a maximum of 5 per cent may be invested in money market instruments.
The benchmark is FTSE EPRA Nareit Asia Pacific Index, which is designed to track the performance of listed real estate companies and REITS in both developed and emerging markets. The index value would be converted into Indian rupees, using RBI reference rate, the document said.
The underlying fund is an open-ended series trust of SMAM Global Investment Trust, based in Cayman Islands. The initial investment amount is ₹5,000, while ₹1,000 is for SIP (subject to a minimum of six SIP instalments of ₹1,000 each). The value of investments may be affected by changes in the market, interest rates, changes in credit rating, trading volumes, settlement periods and transfer procedures; the NAV is also exposed to price/interest rate risk and credit risk and may be affected by government policy, volatility and liquidity in the money markets and pressure on the exchange rate of the rupee, it said.