| Definition |
A company that owns, operates, or finances income-generating real estate assets. |
A pooled investment vehicle that invests in a diversified portfolio of securities like stocks and bonds. |
| Underlying Assets |
Real estate properties such as commercial buildings, apartments, malls, and warehouses. |
Stocks, bonds, money market instruments, or a combination depending on fund type. |
| Investment Objective |
Income generation primarily through rental income and property appreciation. |
Capital appreciation, income, or balanced growth based on fund strategy. |
| Liquidity |
Listed REITs are traded on stock exchanges; generally liquid. |
Mutual funds can be bought or redeemed daily at NAV; highly liquid. |
| Risk |
Subject to real estate market risks, interest rate changes, and economic cycles. |
Depends on underlying securities; can vary from low to high risk. |
| Returns |
Primarily through dividends from rental income and capital gains. |
Through dividends, interest, and capital gains depending on fund holdings. |
| Taxation |
Dividends usually taxed as ordinary income; some tax benefits may apply. |
Tax treatment varies by fund type and investor’s holding period. |
| Management |
Managed by professional real estate managers focusing on property assets. |
Managed by professional fund managers investing in financial securities. |
| Minimum Investment |
Can be bought via stock exchanges with price per share as minimum. |
Varies, often low minimum amounts suitable for small investors. |
REIT vs Mutual Fund