While a mutual fund invests in stocks of listed companies and investors purchase units of the mutual fund, specialised real estate funds would invest in real estate. REMFs can either directly invest in real estate projects, or fund real estate developers or lend to them directly or buy shares of housing finance companies or may even buy their securitised assets.

The share price of mutual fund schemes is based on their NAV, which changes daily.

Though Sebi is yet to make an announcement, even on the eligibility criteria for launching a REMF, sources say property developers will not be allowed to roll out such a fund. This would allow only asset management companies to launch such funds. Already various fund houses, including UTI MF and HDFC MF, are working on developing such REMF schemes with the help of professional bodies like the UK-based Knight Frank.