DSP BlackRock has enhanced the scope of investments for two of its current schemes, DSP BlackRock Equity Savings Fund and DSP BlackRock MIP Fund, to REITs and InvITs.
SEBI recently said mutual funds can invest up to 5 per cent of the net asset value of a scheme in real estate investment trusts/infrastructure investment trusts issued by a single issuer. The maximum allowed investment in alternative instruments by a single fund will be capped at 10 per cent.
According to DSP BlackRock, the investment in units of REITs/InvITs would provide higher yield than the prevalent fixed income yields while the risk profile is much lower than equity investment.
“Investment in units of REITs/InvITs would provide stable income and at least 90 per cent of the net distributable cash flows of the REITs/InvITs will be distributed to the investors of REITs and InvITs,” it added.
Accordingly it has restructured the investment plan. Both DSP BlackRock Equity Savings Fund and DSP BlackRock MIP Fund will invest up to 10 per cent in units issued by real estate investment trusts and infrastructure investment trusts.
The exposure to equity and equity-related instruments will remain 65-75 per cent for Equity Savings Fund. However, investments in debt and money market instruments will be 15-25 per cent, as against the current limit of 25-35 per cent.
Similarly, DSP BlackRock MIP Fund will invest 65-90 per cent of the corpus in debt and money market securities, as against current level of between 75 and 100 per cent. However, there is no change in the investment corpus for equity and equity-related securities which will remain at 0-25 per cent.
Unit-holders wishing to opt out of the scheme following the changes can do so between April 18 and May 2 without paying any exit load, as the changes will take effect from May 3.
A number of firms including IRB Infrastructure, Sterlite Power Transmission, IL&FS Transportation Networks, Reliance Infrastructure and MEP Infrastructure Developers are close to launching InvITs and are in various stages of filing the papers with SEBI. Blackstone Group is also planning to list a REIT in collaboration with the Embassy Group of Bangalore.