A REIT is a collective investment vehicle (typically a trust fund), which pools funds from investors to invest primarily in a portfolio of income-generating real estates.
Let me explain it in a more simplifier term.
I have RM1,000,000 but I wanted to own 100 shop lots in 100 different location in the world. Possible? Of course, with REITs, I may do so. I bought property fund example Hwang-DBS Global Property Fund and automatically I become the joint-owner of (for example) Fashion Valley Mall in California, Rockaway Township in New Jersey, Starhill Shopping Gallery in Malaysia etc.
I do not need find the tenants and take the effort to collect rental as it will be paid to me in the form of dividend each year (or sometimes twice or four times a year). I do understand that with current economy crisis, the property that I owned may be undervalued that my initial purchase price but I don’t care because my objective is to own the property as long as I think I wanted to and I still collecting rental from it. I also do not have monthly commitment to pay the bank for property/housing loan as I do not need to borrow money. I buy what I can afford.
Property Trust available in Malaysia:
• AmPan European Property Equities Fund
• ING Global Real Estate Fund
• AmGlobal Property Equities Fund
• Alliance Global Diversified Property Fund
• HWANGDBS Global Property Fund
• Public Far-East Property & Resorts Fund
• OSK-UOB Asian Real Estate Fund
• AmAsia-Pacific Property Equities Fund
• MAAKL Asia-Pacific REIT Fund
Happy Reading!
Note of Disclaimer:
The above illustration is just an example the help readers to understanding property trust fund. It should not be construed as and shall not form part of an offer or solicitation to buy or sell any unit trusts. Before you decided to buy unit trust, please consult the financial advisor to determine if your risk profile matches the investment fund strategy.
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