Indians Can Invest In East Asian Real Estate Through Kotak MF’s Global Fund

Now more options are available for investors to diversify their portfolio in foreign markets.

Indians Can Invest In East Asian Real Estate Through Kotak MF’s Global Fund
Yagnesh Kansara - 11 December 2020

Kotak Mahindra Asset Management Company (Kotak MF) has come up with a Fund of Funds (FoF) investing in East Asian Real Estate Investment Trust (REITs) on November 7.

It is an open-ended MF scheme that will invest in units of SMAM Asia REIT Sub Trust Fund. SMAM Asia REIT Sub Trust Fund is floated by Sumitomo Mitsui DS Asset Management Company Limited (SMDAM), Japan. The issue of open-ended MF scheme is open for subscription for investors currently and will close on December 21, 2020.

This brings more options for the Indian investors, who want to diversify their investment portfolio by investing in the overseas market. Earlier, there were only two options available to invest in the overseas equity market.

The first option was to go the Mutual Fund (MF) route, dedicated to the foreign market, and invest in its units. The second was to take direct exposure to the foreign equity market through dedicated service providers like brokers.

Nilesh Shah, MD & CEO, Kotak MF said, "While the REIT market has seen limited growth in India, the Asia Pacific region provides a phenomenal opportunity for local investors to benefit from growth across sectors of real estate. These regions are expected to see a massive demand in real estate backed by growth in consumer spending, urbanization, and becoming the epicentre of global trade."

This mutual fund scheme will have a diversified investment portfolio comprising listed REITs that will invest in real estate projects like residential, office, data centres, warehousing, retail, and hospitality. Those who want to diversify their portfolio can invest in this REIT FoF as it allows investors to create a more balanced portfolio with asset allocation beyond the traditional equity and debt instruments.

SMDAM is the subsidiary of Sumitomo Mitsui Banking Corporation Japan. As of 30th September, SMDAM has assets under management and advisory of approximately $150billion, the company said in a statement.

On the other hand, Kotak Securities (KSL), a subsidiary of Kotak Mahindra Bank, announced the launch of a global investment platform for its Indian and NRI investors. KSL has teamed up with Nasdaq-listed Interactive Brokers Group (IBKR) to offer its Indian and NRI customers a platform to invest directly in US equity markets.

KSL is providing a completely digital and seamless experience from onboarding to trading. Investing in US equity markets, now, will be at the click of a button. Clients can use the KSL web-based platform as well as the mobile app for investing.