The Sebi's proposal to introduce Real Estate Mutual Fund will certainly increase the flow of investment. But this requires clarification on issues like the kind of framework and the trading mechanism.

The infrastructure industry in India has been experiencing a rapid growth in its different sections with the urbanization and increasing infusion of foreign investments. The Indian government has taken several initiatives to develop the infrastructure sector, with major emphasis on construction. The construction industry in India has reported an estimated growth of 6.78% on an annual basis. The industry is highly fragmented and has over 3,00,000 companies operating nationwide. As a result, the Indian economy is growing at a scorching pace and the real estate sector is growing even faster. Eventually, more and more money is chasing a limited quantity of high quality product. This makes real estate potentially one of the best investment opportunities. However, high prices and transaction costs make it a difficult investment for an average investor to take bets on this fast-growing sector. Fortunately, a new investment product called Real Estate Mutual Fund (REMF) is being developed which will make it easier for an ordinary investor to invest his hard-earned money in real estate.

The introduction of REMFs has caused a certain amount of simulation to real estate sector. Real estate fund is a fund that buys, develops, manages and sells real estate assets and allows various participants, small and large, to invest in a professionally managed portfolio of real estate properties and expends the retail business by means of real estate development. In India, the entry of real estate funds is already overheated. Realty market is bound to cause quite a stir. A slew of real estate funds promoted by Indian and foreign financial institutions are sowing real estate market for properties with assured return to invest in. HDFC Property Fund, Kshitij Venture Capital Fund and India Advantage Fund (ICICI) are some of the prominent real estate funds in India.

Portfolio Organizer Magazine, Real Estate Mutual Fund, REMF, Foreign Direct investments, FDI, Retail business, Indian economy, Real estate sector, Realty markets, Securities and Exchange Board of India, Sebi, Asset Management Companies, AMCs, Mutual funds, Real Estate Investment Trust, REIT, Commercial Mortgage-Backed Securities.