REITs are equity, not fixed income, says Radhika Gupta

A REIT is a kind of company that owns big buildings, like offices and malls, and collects rent from the people inside them.

Some people think REITs are like bonds, which are safe loans that pay a fixed amount.

Two experts in India say that is a mistake.

They say REITs are more like stocks, because the money you get and the price of your shares can go up and down.

REITs usually pay out about 5-6% each year, which is more than most stocks pay as dividends.

But a REIT does not promise to give your money back, and it has no fixed payment date like a bond does.

The rules in India ask REITs to share at least 90% of their cash with investors and to buy mostly buildings that are already rented out.

REITs are less jumpy than regular stocks, but they can still lose value.

This is why the Indian regulator treats them as equities, not as safe fixed income.