Property has for long been considered a safe and lucrative investment. But it is not very liquid, with transactions requiring extensive legal paperwork. That may change with the launch of funds like ICICI Venture's Rs 1,000 crore Real Estate Fund and HDFC's Property Fund. By investing in these funds, people will now be able to profit from appreciating real-estate values without going through the hassles of actually acquiring a property.

Property funds are not your typical mutual fund but function as venture funds that raise money to invest in emerging opportunities. These funds will invest in both commercial as well as residential properties across the country. However, since property is not as liquid as an equity share or a debenture, investors will have to keep in mind an investment horizon of at least five years. Also, the threshold would be very high. With a minimum investment of Rs 2 crore, ICICI Venture's property fund is mainly targeted at institutions and NRIs.

Though property funds are new in India, real-estate investment trusts (REITs) have been functioning in developed markets for several decades. Says Renuka Ramnath, CMD of ICICI Venture Funds Management: "These funds will eventually evolve into REITs." This transition is imperitive if investors need to exit after a few years.

Following in the footsteps of ICICI Venture is HDFC, which has received SEBI's nod to launch a property fund. The fund will buy, develop, manage and sell property and also function as a venture capital fund.

MONEY TALKS

READY FOR TAKEOFF: Jet Airways, India's largest private airline, is offering 17.27 million shares, or 20 per cent of its expanded equity, to the public to repay debt, build new facilities and fund expansion. Jet Airways is only going to have one roadshow in India on 11 February and the rest will be held overseas. The IPO, which opens this week, is expected to be priced at Rs 900 a share.

AUTO LOANS TO BE CHEAPER: The State Bank of India has announced the slashing of auto loan rates by 2 per cent from 15 February. The bargain slab will be offered at 7.5 per cent, while the big-ticket loans for higher segments will be different. Currently ICICI Bank offers auto loans between 9 and 11 per cent to consumers. Therefore, the cut in interest rate will make the State Bank of India more attractive for borrowers.

I INVEST IN...

Riteish Deshmukh, Actor
"Everyone has a chartered accountant and so do I, but I have never even seen his face. As for investments, I haven't really earned too much. But I don't believe in investing in the stockmarket because I don't understand it. Since I am an architect, I would invest in property."

MUTUAL FUND TRACKER

Tax Plans Zoom Top three tax-planning schemes and MIPs   1 YEAR 6 MONTHS 1 MONTH Equity Schemes (Tax Planning) Magnum Taxgain 76.43 62.37 9.43 Pru ICICI Tax Plan 69.79 56.96 8.49 Sundaram Taxsaver 68.86 59.09 5.82 MIPs (Debt-oriented) Birla Asset Allo Cons 10.76 9.42 0.48 FT India MIP 8.71 7.37 0.92 HDFC MIP Long-term 8.45 7.55 0.52 Figures are percentage returns as on February 7, 2005. Funds ranked on basis of one-year returns.                                                                            Source: ValueResearch Tax plans were the biggest wealth creators among mutual funds in the past year. For risk-averse investors, MIPs were a safe bet.

-Compiled by Malini Bhupta

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