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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

Which statement about units of an Infrastructure Investment Trust (InvIT) is correct?

Units of a publicly offered InvIT can be listed and traded on stock exchanges. InvITs are closed-ended and invest in infrastructure assets, so investors exit by selling on the exchange rather than redeeming at NAV with the trust.

  1. AUnits are issued only to the sponsor and can never be traded
  2. BUnits are redeemed by the trust at NAV on any business day, like an open-ended mutual fund
  3. CUnits of a publicly offered InvIT can be listed and traded on stock exchangesCorrect
  4. DInvITs may invest only in residential real estate

Explanation

InvITs are closed-ended structures whose units are listed on exchanges, so investors exit by selling on the exchange rather than through redemption at NAV. They invest in infrastructure projects, not residential real estate. Hence only the listing statement is correct.

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