Public offering REITs, which have attracted much attention from the market, are advancing at "super speed". Since the evening of May 17, the first batch of 9 publicly offered REITs funds have been officially approved by the CSRC. Bian Xiao compiled what REITs fund is here for your reference. I hope you can gain something in the reading process!

What is REITs Fund?

REITs (Real Estate Investment Trusts), that is, real estate investment trust funds, simply means that real estate assets or rights are transformed into standardized financial products with strong liquidity through securitization and publicly traded on the stock exchange. Domestic pilot infrastructure public offering REITs refers to standardized financial products that raise funds from social investors according to law to form fund property, hold infrastructure projects through special purpose carriers such as infrastructure asset-backed securities, and fund managers actively manage and operate the above infrastructure projects, and distribute most of the generated income to investors.

In a word, public offering REITs is a kind of financial product that can raise funds from many investors and invest in real estate, so as to obtain income.

Different from ordinary Public Offering of Fund, public offering REITs determine the subscription price of fund shares through offline inquiry, and public investors participate in the subscription of fund shares through sales organizations at the subscription price determined by inquiry.

The benefits of REITs mainly come from two parts.

1, a high proportion of dividends. Infrastructure public offering REITs adopt a compulsory dividend policy, requiring the income distribution ratio to be no less than 90% of the annual distributable amount of the consolidated fund. The stable dividend rate is similar to the dividend distribution of bonds, showing the characteristics of debt, but the compulsory dividend is not equal to the fixed interest return of bonds.

2. Transaction price difference. The public offering of REITs in infrastructure is closed, but it will be listed and traded on the exchange later, and investors can bid in the secondary market. The rise and fall of infrastructure public offering REITs are limited to 30% on the first day of listing and 10% after the first day of listing.

Judging from the declared REITs products, the estimated cash flow distribution rate is generally between 4%- 12%. Guo Jin, Zheshang and REITs from rich countries have also predicted the internal rate of return, which is basically around 6%, exceeding the general income of traditional national debt and medium and high-grade credit bonds.

The fund manager of Bosera Fund Infrastructure Investment Department said that from the perspective of risk-return characteristics, public offering REITs are between stocks and bonds, and the risk characteristics are higher than bonds, and different projects will have different risk levels.

The relevant person in charge of Ping An Fund also said that as an alternative investment product, publicly offered REITs have low correlation with other mainstream investment products such as stocks and bonds, which can effectively diversify the risk of the portfolio. In the long run, real estate investment trust funds have good long-term returns.

Is REITs Fund Worth Buying?

From the perspective of product design, infrastructure public offering REITs are still mainly for strategic investors and institutional investors.

According to the regulations, the initial public offering of REITs can be divided into strategic placement, offline inquiry pricing, offline placement and public investor subscription. Among them, strategic investors include the original owners of infrastructure projects or their related parties under the same control, as well as other professional institutional investors, and the original owners' share allotment ratio is at least 20%; Offline investors are professional institutional investors such as securities companies, fund management companies, trust companies, finance companies, insurance companies, commercial banks and their financial subsidiaries, and the placement ratio shall not be less than 70% of the remaining shares. In other words, the highest proportion of rights issue for individual investors is only 24%.

For investors, the product structure and other information of public offering REITs are complicated, which may be the most complicated product type that the public contacts at present. Then, what is the investment value of publicly offered REITs products for ordinary investors?

Bosera Fund said that public offering REITs, as an effective tool for decentralized portfolio management, have low correlation with other asset classes. Investing in public offering REITs helps to reduce the risk of the portfolio composed of stocks and creditor's rights and improve its dividend rate. In addition, because public offering REITs have mandatory dividend requirements and benefit from stable dividend level and mature asset operation, they can effectively hedge the risk of cyclical fluctuations.

Soochow Fund said that for investors, the infrastructure market has a huge volume and stock. In the past, the investment value of infrastructure assets in the capital market can only be partially reflected in bonds, ABS and other products, and these products are niche, and the participation threshold of ordinary investors is high. This public offering of REITs has brought high-quality infrastructure projects to the market in the mode of Public Offering of Fund, which has expanded the market participation, and ordinary investors are also expected to share the dividends from the development of the national economy and the real estate market. Moreover, the public offering of REITs has the characteristics of clear investment, compulsory dividends and low leverage restrictions.

In addition, Soochow Fund said that by setting the compulsory dividend ratio, public offering REITs can distribute the possible income from investment operation to investors in a relatively high proportion, so that investors are expected to obtain relatively stable investment income. This is in line with the allocation direction of long-term funds such as insurance funds, pensions and enterprise annuities.

The fund manager of Bosera Fund Infrastructure Investment Department added that from overseas experience, both individual investors and institutional investors will buy REITs products. Because the investment period is long and the fluctuation is relatively stable, individual investors usually invest through pension accounts; However, in China, due to the complexity of REITs product design, the initial acceptance of ordinary investors is average, and the main audience of such products is still institutional investors.

Fund-related articles:

★ Investment Guide for Fund Market

★ Understand the basic knowledge of the fund.

★ Four common ways to buy funds

★ Why is the fund valuation rising but the net value falling?

★ Risk analysis of fund investment

★ Market analysis

★202 1 Why did the fund fall?

★ Matters needing attention in private equity investment

★ The fluctuation rhythm of the stock market in each month of the year

★ Advantages and disadvantages of stock dividends