New Delhi, Nov. 9 -- A growing number of mutual fund houses are launching funds focused on real estate investment trusts (Reits), following regulatory changes that have classified Reits as equities and allowed them to be included in market indices. But while these funds offer a simpler way to access the asset class, their portfolios may not provide pure Reit exposure, and their tax treatment differs from direct investments.

Reits pool investors' money to own income-generating commercial real estate. They can add diversification and rental-income exposure to a portfolio, but investing directly involves selecting trusts and navigating the tax treatment of different payouts. Should investors take the mutual fund route instead?

Four of the ...