“Investors will gain with the rise in rentals and appreciation of the property value, and at the same time feel secure as the funds will be managed by experienced people, but we are reluctant to launch an REMF now,” said the CEO of a leading mutual fund. Reason: realty prices have witnessed a correction in many metros, and market arithmetic has changed in the last two months.

Investment in real estate has always been a tricky game. Time and again, there have been talks of a property bubble waiting to burst. The government has shown concern in the past on rising real estate prices, even taking steps to make it difficult for foreign money to chase Indian properties. But nobody is questioning regulator’s guidelines as MF managers feel REMFs would only provide an option to investors to diversify their portfolio.

In its notification issued on April 25, Sebi had said at least 35 per cent of the new assets should be invested directly in real estate while the balance may be invested in securities of companies dealing with real estate.