Real Estate Fund

8/8/2019 Real Estate Fund

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Students Colloquium Report

On

Consumer Perception

For

MUTUAL FUND (REAL ESTATE FUND)

Submitted to: Submitted By: -Dr. Himani Joshi Group 5: -(Academic coordinator) Shruti Garg

Stevens Business School Jimmy ThakkarBhumika Patel

Ankit Dave

Chetan Chhabhaiya

Deepak Singh


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Contents

Sr. no Particulars Pageno

1 Acknowledgement 3

2 Preface 4

3 Executivesummary 54 Introduction 6

4.1 Meaning ofMutual Fund

4.2 History ofMutual Fund

4.3 TypesofMutual Fund

5 Objectiveof research 12

6 Researchofmethodology 13

7 Real Estate Mutual Fund 14

8 Major PlayersofReal Estate Mutual Fund 15

9 Performance analysis 16

9.1 NAV

9.2 Total Investment9.3 RiskAssociated

9.4 Beta

9.5 Alpha

9.6 Standard Deviation

9.7 Sharpe Ratio

9.8 Relationship between Sensex and Mutual Fund

10 Data Analysis 23

10.1 InvestmentCriteria

10.2 Investment Patten

10.3 Awareness LevelofMutual Fund10.4 Whether an Investoror Not

10.5 Likenesstowards Mutual Fund

10.6 Reasonfor Investment

10.7 Most Preferred TypeofMutual Fund

10.8 Future Perspective

10.9 AwarenesslevelofReal Estate Mutual Fund

10.10 Investoror Not

10.11 Betteroptionfor ROI

11 Limitations 30

12 Recommendation 31

13 Conclusion 3214 Appendices 33

14.1 Questionnaire

15 Reference 35


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1) ACKNOWLEDGEMENTDuring our Project Report Assignment, we realized that Success is not

destination, but a journey. This may not have been so accurate and successful

without the help, guidance and support of certain people who acted as guides,friends andtorch bearers along theway.

Wewould like to thankSTEVENS Business School for introducing the practical

projectincoursecurriculum.

Weexpressourdeepest andmostsincerethankstoour project guide Dr.HIMANI

JOSHI (Academic coordinator).The Project could not be completed without her

support and guidance.

Further, we are thankful to all the respondents of our questionnairewho spared

theretimefromtheir busy schedule andobligedus by giving theirco-operation and

theinformationweneeded.


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2) PREFACEGive a man a fish, he will eat it

Train a man to fish, he will feed his family

The above saying highlights the importance of Practical knowledge. Practical

training is an important part of the theoretical studies. It is of an immense

importanceinthefieldofmanagement. Itoffersthestudenttoexplorethevaluable

treasure of experience and an exposure to real work culture followed by the

industries and thereby helping the students to bridge gap between the theories

explainedinthe books andtheir practicalimplementations.

Research Project plays animportant roleinfuture building ofanindividualsothat

he/shecan betterunderstandthe realworldinwhichhe/shehastoworkinfuture.

The theory greatly enhancesour knowledge and providesopportunities to blend

theoreticalwiththe practicalknowledge.


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3) EXECUTIVE SUMMARYInfew years Mutual Fundhasemerged as a toolforensuring onesfinancialwell

being. Mutual Fundshavenotonly contributedtothe India growthstory buthave

also helped families tap into the successof Indian Industry. As information and

awarenessis rising more andmore people areenjoying the benefitsofinvesting in

mutualfunds.

Themain reason thenumberof retailmutual fund investors remainssmall is that

nineinten peoplewithincomesin India donotknowthatmutualfundsexist. But

once people are awareofmutual fund investmentopportunities, thenumberwho

decide to invest inmutual funds increases to asmany asone in five people. The

trickforconverting a personwithnoknowledgeofmutualfundsto a new Mutual

Fundcustomeristounderstandwhichofthe potentialinvestors aremorelikely to

buy mutualfunds andtousethe right argumentsinthesales processthatcustomers

will accept asimportant and relevanttotheirdecision.

This Project gave us a great learning experience and at the same time it gave

enough scope to implement my analytical ability. The analysis and advice

presented in this Project Report is based on market research on the saving and

investment practices of the investors and preferences of the investors for

investment in Mutual Funds. This report will help to know about the investorsPreferencesin Mutual Fund.


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4) INTRODUCTION4.1 Mutual Fund:

A mutual fund is a group of investors operating through a fund manager to

purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost

efficient andvery easy to invest in. By pooling money together in a mutualfund,

investorscan purchasestocksor bondswithmuchlowertrading coststhanifthey

tried todo iton theirown. Also,onedoesn'thave to figureoutwhich stocksor

bonds to buy. But the biggest advantage of mutual funds is diversification.

Diversification means spreading out money across many different types ofinvestments. Whenoneinvestmentisdown anothermight beup. Diversificationof

investment holdings reduces the risk tremendously.

4.2 History ofMutual Fund:

Themutualfundindustry in India startedin 1963 withtheformationofUnit Trust

of India, at the initiativeof the Governmentof India and Reserve Bankof India.

The history of mutual funds in India can be broadly divided into four distinct

phases.

y First Phase 1964-87Unit Trustof India (UTI) wasestablishedon 1963 by an ActofParliament. Itwas

set u p by the Reserve Bank of India and functioned under the Regulatory and

administrativecontrolof the Reserve Bankof India. In 1978 UTI wasde-linked

fromthe RBI andthe Industrial Development Bankof India (IDBI) tookoverthe

regulatory and administrativecontrol in placeofRBI. The firstscheme launched

by UTI was Unit Scheme 1964. At the endof 1988 UTI had Rs.6700 croreso assetsundermanagement.


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y Second Phase 1987-1993 (Entry of Public Sector Funds)1987 marked theentry ofnon- UTI, publicsectormutual funds setup by public

sector banks and Life InsuranceCorporationof India (LIC) and General Insurance

Corpo

ration

of

Indi

a (GIC

). SBI Mutu

al

Fund

w

asthe

fi

rst

non-

UTI Mutu

al

Fund

established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab

National BankMutual Fund (Aug 89), Indian BankMutual Fund (Nov 89), Bank

of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

mutualfundin June 1989 while GIChadsetup itsmutualfundin December 1990.

At the end of 1993, the mutual fund industry had assets under management o

Rs.47,004 crores.

y Third Phase 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indianmutualfund industry, giving the Indian investors a widerchoiceoffundfamilies.

Also, 1993 was the year inwhich the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered and

governed. Theerstwhile Kothari Pioneer (nowmergedwith Franklin Templeton)

wasthefirst privatesectormutualfund registeredin July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functionsunderthe SEBI (Mutual Fund) Regulations 1996.

Thenumberofmutualfundhouseswentonincreasing,withmany foreignmutual

fundssetting up fundsin India and alsotheindustry haswitnessedseveralmergers

and acquisitions. As attheendof January 2003,therewere 33 mutualfundswith

total assetsofRs. 1,21,805 crores. The Unit TrustofIndia with Rs.44,541 croreso

assetsundermanagementwasway aheadofothermutualfunds.

y Fourth Phase since February 2003In February 2003, following the repealof the Unit Trustof India Act 1963 UTIwas bifurcated intotwoseparateentities. One isthe Specified Undertaking of the

Unit TrustofIndia with assetsundermanagementofRs.29,835 crores as attheend

of January 2003, representing broadly,the assetsofUS 64 scheme, assured return

and certain other schemes. The Specified Undertaking of Unit Trust of India,

functioning under an administrator andunder the rules framed by Governmento

India anddoesnotcomeunderthe purviewofthe Mutual Fund Regulations.


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Thesecondisthe UTI Mutual Fund,sponsored by SBI, PNB, BOB and LIC. Itis

registeredwith SEBI and functionsunder the Mutual Fund Regulations. With the

bifurcationof theerstwhile UTI whichhad in March 2000 more than Rs.76,000

croresofassetsundermanagement andwiththesetting up ofa UTI Mutual Fund,

conforming tothe SEBI Mutual Fund Regulations, andwith recentmergerstaking

place among different privatesectorfunds,themutualfundindustry hasenteredits

current phaseofconsolidation and growth.

The graphindicatesthe growthofassetsoverthe years.


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4.3 TypesofMutual Fund:

On the basisof their structure andobjective,mutual fundscan beclassified into

following majortypes:

y Closed-end fundsA closed-endmutualfundhas a setnumberofsharesissuedtothe publicthrough

aninitial publicoffering.

y Open-end fundsOpenendfunds areoperated by a mutualfundhousewhich raisesmoney from

shareholders andinvestsin a group ofassets.

y Large cap fundsLargecap funds arethosemutualfunds,whichseekcapital appreciation by

investing primarily instocksoflarge bluechip companies.

y Mid-cap fundsMidcap funds arethosemutualfunds,whichinvestinsmall/mediumsized

companies. Asthereisnostandarddefinitionclassifying companies.

y Equity fundsEquity mutualfunds are alsoknown asstockmutualfunds. Equity mutualfunds

invest pooled amountsofmoney inthestocksofpubliccompanies.

y Balanced fundsBalancedfundis alsoknown ashybridfund. Itis a typeofmutualfundthat buys acombinationofcommonstock, preferredstock, bonds, andshort-term bonds.

y Growth fundsGrowthfunds arethosemutualfundsthat aimto achievecapital appreciation by

investing in growthstocks.


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y No load fundsMutualfundscan beclassifiedintotwotypes- Loadmutualfunds and No-Load

mutualfunds.

y Exchange traded fundsExchange Traded Funds (ETFs) represent a basketofsecuritiesthatistradedon an

exchange,similarto a stock. Hence,unlikeconventionalmutualfunds.

y Value fundsValuefunds arethosemutualfundsthattendtofocusonsafety ratherthan growth,

andoftenchooseinvestments providing dividends aswell ascapital appreciation.

y Money market fundsA money market fund is a mutual fund that invests solely in money market

instruments. Money market instruments areformsofdebtthatmature in lessthan

one year and arevery liquid.

y International mutual fundsInternationalmutualfunds arethosefundsthatinvestinnon-domesticsecurities

marketsthroughouttheworld.

y Regional mutual fundsRegional mutual fund is a mutual fund that confines itself to investments in

securitiesfrom a specified geographical area,usually,thefund'slocal region.

y Sector fundsSector mutual funds are those mutual funds that restrict their investments to a

particularsegmentorsectoroftheeconomy.


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y Index fundsAnindex fundis a mutualfundorexchange-tradedfundthat aimsto replicatethe

movementsofanindex ofa specificfinancialmarket.

y Fund of fundsA fund of funds (FoF) is an investment fund that holds a portfolio of other

investmentfunds ratherthaninvesting directly inshares, bondsorothersecurities.


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5) OBJECTIVE OF STUDY1. Tofindoutthe Preferencesoftheinvestorsfor Asset ManagementCompany.

2. Toknowthe Preferencesforthe portfolios.

3. Toknowwhy onehasinvestedornotinvestedin Mutualfund.

4. Tofindoutthemost preferredchannel.

5. Tofindoutwhatshoulddoto boost Mutual Fund Industry.


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6) Research methodologyThis reportis basedon primary aswellsecondary data,however primary data

Collection was given more importance since it is overhearing factor in attitude

studies. Oneofthemostimportantusersofresearchmethodology isthatithelpsinidentifying the problem, collecting, analyzing the required information data and

providing an alternativesolutiontothe problem .It alsohelpsincollecting thevital

information that is required by the top management to assist them for the better

decisionmaking bothday today decision andcriticalones.

y Data sources:Researchistotally basedon primary data. Secondary data can beusedonly forthe

reference. Research has beendone by primary data collection, and primary datahas beencollected by interacting withvarious people. Thesecondary data has beenCollectedfromvarious journals andwebsites.

Sampling:

y Sampling procedure:Thesamplewasselectedofthemwho arethecustomers/investorsofMutual Fund.

Itwas also collected through personal visits to persons, by formal and informal

talks andthroughfilling up the questionnaire prepared. Thedata has been analyzedby using mathematical/Statisticaltool.

y Sample size:Thesamplesizeofour projectislimitedto 41 peopleonly.

y Sample design:Data has been presentedwiththehelp ofbar graph, piecharts,line graphsetc.


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7) REAL ESTATE MUTUAL FUNDSReal Estate Mutual Fund or the REMF acts as a conduit or a link between an

investor and real estate and helps manage the funds of the investors and invest

theminthe realestatesector.

Investments: REMF can invest in a developed property, and as the value

appreciates over a period of time, it can offload its investment to make capital

gains. It alsohas anoptionofdeveloping the property onitsown andthenselling it

at an appropriatetimeensure adequate returns. Furthermore,itcan realize regular

streamof returns through leasing, financing todevelopers and mortgage backed

financin

g. The

investment

avenues

arethe

use

rsof

funds

in

the

whole

framewo

rk

.

y Structure:The Regulationsdefine REMF as a schemeofa mutualfundestablishedinthe

formofa trust,whichinvestsdirectly orindirectly in realestate assetsorother

permissible assets. Every REMF schemeshall becloseended anditsunitsshall be

listedon a recognisedstockexchange.

SEBI and various committees formed for the purpose of studying REMFs

considered similar regimesof real estate investments inother countries. Finally,

SEBI chose the existing mutual fund structure. Firstly, this was because the

existing MF Regulationsincorporatevariouschecks and balanceswhichfurtherthe

cause of investor protection. In addition, they provide various investment

restrictions so as todiversify the investment andminimise the risk. Last, butnot

least, tax benefits available to themutual funds is another important incentive to

structurethem asschemesofmutualfunds.


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y Eligibility:All existing mutual funds are allowed to launch REMF schemes if they have

adequate numbers of key personnel or directors with experience in real estate.

Specific

all

y,the

Regul

ation

presc

ribes

aminimum

track

reco

rd

of

five

yearsin

the

real estate business for the fund houses wanting to establish mutual funds

exclusively forlaunching REMF schemes,in additionto allothereligibility criteria

applicableforsponsoring a mutualfundunderthe MF Regulations.


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8) Major Players of Real Estate MutualFunds

Among the abovestated playersonly

ING haslaunched Real Estate Mutual Funds and restother providestheserviceof

Portfolio Management Service (PMS). Under Portfolio Management Service the

institution fixesup the totalcollection tocertain amount and than breaksup that

amountinto 4 or 5 equal parts.

Forexample if HDFC plans to invest in realestate and fixes the totalcollection

upto Rs 1 crore. Itmay than breakup this 1 crore into 20 lakheachor 25 lakh.

Basically the investment in PMS is made by high networth Investment (HNI).

However in Real Estate Mutual funds are initial investmentsmay starts from Rs5000 asisdeclared by ING in Retail auto Rs 1,00,00,000 in Institutional .

MajorPlayers

Private

HDFC

ICICI

ING

IL & FSDHFL

Kshitij

KotakMahindra

Anand Rathi

Public

SBI


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In Publicsectorthereisexisting only one playeri.e. SBI andthattooithasnot yet

launchedits REMF. The processisstill group on.

So, theconclusiondream isonly ING in privatesector is playing for Real Estate

Mutu

al

Funds

.


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9) Performance analysis9.1 Net Asset Value (NAV):

ING waslaunchedon 31st

December; 2007.PerformanceofING REMF forthelasttwo yearsis given below,

2007 2008 2009

Retail growth

option

9.37 9.37 8.85

Retaildividend

option

9.38 9.38 8.85

Institutional

growthoption

8.18 8.18 7.73

Institutional

dividendoption

8.37 8.37 7.90

9.2 Total Investment:

The only private playerin Real Estate Mutual Fundis ING Investment. ING

Investment. ING launched its REMF on 31st

Dec. 2007. The benchmarkindex

which ING thought to reach upto S&P BMI (USA). The Net Assets under

Management or the total corpusthat have been collected by the company isRs 141.37crores.

Through this theconclusioncan bedrawn there is little awarenessof Real Estate

Mutual Funds. Thisisthe analysisthatisdrawnfromthesamplescollected.


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9.3 RiskAssociated:

y Inhigh risk, 75% isinequity and remaining isindebt.y I nmedium risk, 50% isinequity and 50% indebt.y Inlow risk, 25% isinequity and remaining isindebt.

9.4 Beta:

This common measure compares a mutual fund's volatility with that of a

benchmarkandissupposedto givesomesenseofhowfar youcanexpect a fundtofallwhenthemarkettakes a dive,orhowhighitmightclimb ifthe bullis running

hard. A fundwith a beta greaterthan 1 isconsideredmorevolatilethanthemarket;

less than 1 means lessvolatile. So say your fund gets a beta of 1.15 -- it has a

history offluctuating 15% more thanthe benchmark if themarket isup,thefund

shouldoutperform by 15%. Ifthemarketheadslower,thefundshouldfall by 15%

more.

But beta, though a useful guide, is far from perfect, especially when used as a

proxy for "risk." The problemhere, aswithmany riskmeasures,isthe benchmark.

The benchmarkhasto be a correctmeasureofcomparisononly thenwillthe betahold any indicativevalue.

Risk

HighRiskMedium

RiskLowRisk


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9.5 Alpha:

Alpha was designed to take beta one step further. It looks at the relationship

between a fund's historical beta and its current performance, or the difference

between the return betaswould lead you toexpect and the return a fund actually

gets. An alpha of0 simply meansthatthefunddid aswell asexpected,considering

the risksittook. So ifthatfundwiththe beta of1.15 beatthemarket by 15% (or

underperformedit by 15% whenthemarketwasdown),itwouldhave a 0 alpha. If

yourfundhas a positive alpha thatmeansit returnedmorethanits beta predicted.

A negative alpha meansit returnedless. Thetroublewith alpha isthatit'sonly as

good as its beta. If the benchmark isn't appropriate to a fund inderiving its beta,

then alpha, too, will be imprecise.

9.6 Standard Deviation:

Meet themost popularof the riskmeasures--onewith a distinct advantageover

beta. While beta compares a fund's returnswith a benchmark,standarddeviation

measureshow far a fund's recentnumbers stray from its long-term average. For

example, if Fund X has a 10% average rateof return and a standarddeviationof

5%, most of the time, its return will range from 5% to 15%. A large standard

deviationsupposedly shows a more risky fundthan a smallerone. Buthere, again,

what's problematic is your reference point. The number alone doesn't tell you

much. Youhavetocompareonestandarddeviationwiththeothers among a fund'speers. But a more glaring problem is that the standarddeviation system rewards

consistency above allelse. A fundisconsideredstable basedontheuniformity of

itsownmonthly returns. So if it losesmoney butdoessovery consistently itcan

have a very low standard deviation -- down 3% each and every month wins a

standarddeviationof zero. And likewise, a fund that gains 10% onemonth and

15% thenextwould be penalized by a highstandarddeviation -- a reminder that

volatility, although perhaps a cousinto risk,itselfisn'tnecessarily a badthing.


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9.7 Sharpe Ratio:

Thisformula,worked by Nobel Laureate Bill Sharpe,triesto quantify how a fund

performs relativetothe riskittakes. Take a fund's returnsinexcessofa guaranteed

investment (a 90-day T-bill) anddivide by thestandarddeviationofthose returns.

The biggerthe Sharpe ratio,the better a fund performedconsidering its riskiness.

Here, again, youhave the problemof relativity -- the ratio itselfdoesn't tell you

anything, youhavetocompareitwiththe Sharpeofotherfunds. Butthis ratiohas

an advantageover alpha because itusesstandarddeviation insteadof beta as the

volatility variable, andtherefore youdon'thavetoworry that a funddoesn't relate

well to the chosen index.

Overseas,onehasmutualfund rating companies-like Morning Starwhich provide

viewsof risk. Morningstarsays thatwhatwe investors really care about iswhenourfunds LOSE money,notwhenthey'redoing betterthanthe benchmarkorthan

theirlong-term averages. Itmeasureshowoften and by howmuch a fundtrailsthe

monthly T-bill rate, and then compares that average loss with that for the

investmentclass. The average for a class is 1.00,sonumbers above thatmean a

fund is riskier than its peers, and below is considered less risky.

In India we still have to introduce this kind of a risk rating. However till then

rememberone needs to be consciousof risk, but not push it to the lastdecimal

point. It's about awareness, ratherthanmathematics.

9.8 Relationship between Sensex and Mutual Fund:

Sensex and mutual funds share a very strong relationshi p. Both of them work

simultaneously. Thereis a big timesensitive andwild relationship in betweenthe

Sensex andmutualfunds. The generalcriteria are,wheneverthe Sensex increases

the net asset value of mutual fund also increases. But this may not be the case

every time. Itmay alsohappenthatthe Sensex isincreasing andthenet assetvalue

ofthemutualfundsisdecreasing oritis remaining constant.

This happens because the mutual fund institutions invest in the equities of the

otherscompanies. Nowiftheshareofthecompany risesthenet assetvalueofthe

fundincreases andvice versa.


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Forexample: There arethirty scripsin Sensex 30 andoutofthese 30, 5 scrips are

relatedtomutualfunds. Itmay happen thatthe rest 25 scripshave a rise intheir

prices while the rest 5 scrips , related to mutual funds, may have fall in the

NAVs. Than in thatcase the NAVs,of themutual fundswhohave invested in

those 5 scripswill godown though the Sensex is rising. Itmay alsohappen that

the Sensex shows a rise by 20% andthemutualfunds NAV risesoroutperformsit

by 50%.Thusthe relationship between Sensex andmutualfundisvery strong.


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10)Data analysis10.1 Investmentcriteria

According tooursurvey 37 respondentssaidthatthey make aninvestmentwhile 4

outof41 repliedthatthey arenotinvestors.

0

510

15

20

25

30

35

40

Yes No

Series1


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10.2 Investment pattern:

Particulars No.ofrespondents

Post Office 3

equities 17

Govt. Securities 11

Insurance 41

Real Estate 0

Mutual Funds 18

0

5

10

15

20

25

30

35

40

45

Postoffice Equities Govt.

securities

Insurance Realestate Mutulfund

Series1


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10.3 Awareness LevelofMutual Funds:

Awarenessofmutual funds: 39 respondentswere awareofmutual fundswhile 3

wereunawareofit.

10.4 likenesses Towards Mutual Fund:

Outof39 respondents 28 haveinvestedinmutualfunds and 13 dont preferit.

0

5

10

15

20

25

30

35

40

Yes No

Series1

0

5

10

15

20

25

30

Yes No

Series1


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10.6 Reasonfor Investment:

Low Risk 26

Tax Benefits 14

Low Involvement 04

Busy Schedule 02

10.7 Most Preferred TypeofMutual Funds

0

5

10

15

20

25

30

LowRisk Tax Benefits LowInvolvement BusySchedule

Series1

0

2

4

6

8

10

12

14

16

Open

Ended

Close

Ended

Balanced

Fund

Income

Fund

Growth

Fund

Taxation

Fund

Series1


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Openended 14

Closeended 08Balancedfund 0

Incomefund 16

Growthfund 05

Taxationfund 05

10.8 Awarenesslevel Real Estate Mutual Funds:

Awareness regarding realestatemutual funds: Outof 41 respondents 25 wereof

thesefundswhilethe rest 16 wereunaware.

10.9 Currentinvestorin realestatemutualfunds:

0

5

10

15

20

25

Yes No

Series1


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Noneof the respondent, according tooursurvey, is the investor in the realestate

mutualfunds.

10.10 Betteroptionfor ROI:

36 ofthe respondentswereoftheviewthat realestatemutualfundsdonot provide

better rateofreturnwhile restsays yesforit.

0

5

10

15

20

25

3035

40

45

Yes No

Series1

0

5

10

15

20

25

30

35

40

Yes No

Series1


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10.11 Goodoptionincurrentmarketsituation:

According tooursurvey 11 respondentssaidthatthey holdthe positiveviewwhile

the rest 36 werenotinitsfavour.

0

5

10

15

20

25

30

Yes No

Series1


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11)Limitations:y Someofthe personswerenotso responsive.y Possibility oferrorindata collection becausemany ofinvestorsmay have

not given actual answersofmy questionnaire. Sizemay not adequately

representthewholemarket.

y Some respondentswere reluctanttodivulge personalinformationwhichcanaffectthevalidity ofall responses.

y The researchwasconfinedto a certain partofAhmedabad.


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12) Recommendationsy There is a very less awareness amongstthe people about realestatemutual

funds. Eventhosewho arecurrentinvestors arenot aware abouttheexistingNAVs.

y To increase investment in this sector various other benefits should beprovidedsothattheinvestorscan betemptedtomake aninvestment.

y Publicsectorsshould alsocomeup inthisfield.y More privatesectorcompaniesshouldstep in.


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13) ConclusionThe success of REMF is going to depend to a great extent on addressing

complexities associatedwiththe Indian realestatesector. Forexample,stamp duty

isvery highin India. Theexisting stamp duty structureneedsto be rationalisedforschemes to operate efficiently. This is a responsibility of states and unless the

Central Governmentdecides tomake ituniform, itwill bedifficult toexpect any

changes in the stamp duty regime. Poor maintenance of land records is another

important stumbling block. India doesnotoffer title certification, and properties

areoftenthesubject-matteroflitigationfor protracted periodsoftime. In addition,

time-consuming legal processesis anotherimportant area ofconcern.

The Regulation also lacks a stringent disclosure schedule with respect to the

launching of REMF schemes. The Regulationsdonot specify disclosuresof theproperties held by REMFs periodically. It is imperative that SEBI announce a

detailedsetofdisclosuresfor REMFs that take into account the risks involved in

real estate investments. A uniform set of disclosures would enable investors to

comparevarious REMF investmentoptions.


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14)Appendices14.1 Questionnaire:


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15) REFERENCE

y Www. Indiahousing.comy Www. Moneycontrol.comy www.amfi.comy

Business

.m

psofindi

a.com

y www.economywatch.comy www.iloveindia.comy Pratikshahy Tirlochandshah

Documents

Real Estate Fund