REITs are often viewed by investors as a fixed-income-like investment option. However, Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, says this is a misconception. According to her, REITs are not fixed-income products but are classified as an equity asset class, and there is a reason why market regulator Sebi treats them as equity.
Gupta highlighted that investors should consider both returns and volatility when evaluating REITs. While equity market volatility in India has typically ranged between 14-16%, depending on the period considered, a pure-play REIT index has historically shown volatility of around 10-11%, which is lower than equities.
