NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which statement about Infrastructure Investment Trusts (InvITs) is correct?
InvITs pool money from investors to hold infrastructure assets such as roads or transmission lines and distribute the cash flows generated to unit holders. They are not daily-redemption open-ended funds, and units are usually traded on stock exchanges.
- AThey pool funds to invest in infrastructure projects and pass cash flows to unit holdersCorrect
- BThey invest only in equity shares listed on stock exchanges
- CThey are open-ended schemes with daily redemption at NAV
- DThey can be sponsored only by banks
Explanation
InvITs are trust structures that hold infrastructure assets such as roads or power transmission and distribute cash flows to unit holders. They are not daily-redeemable open-ended schemes; units are typically traded on exchanges.
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