HDFC Asset Management Company Ltd has announced the launch of HDFC Housing Opportunities Fund – Series I, a mutual fund scheme dedicated to housing and allied businesses. This scheme is a closed-ended thematic equity fund that aims to provide long-term capital appreciation by investing predominantly in equity and equity-related instruments of entities engaged in and/or expected to benefit from the growth in housing and its allied business activities.
The new scheme will deploy at least 80% of its corpus in equity and equity-related instruments of entities in housing and its allied business activities. It will invest up to 20% in suitable corporate debt. Additionally, depending on market conditions, it may purchase Put Options to de-risk the portfolio/lock gains closer to the maturity.
The NFO period of the HDFC Housing Opportunities Fund – Series I is from November 16 to November 30, 2017. The minimum amount that can be invested in this fund is Rs 5,000. The scheme is benchmarked against India Housing and Allied Businesses Index, specifically created for this fund.
The Fund is Suitable for Investors Looking To:
# Participate in the expected growth in Indian housing sector and its allied businesses.
# Achieve capital appreciation through investment into equities of entities involved in housing and allied sectors.
The fund, however, is not suitable for risk-averse investors. Since the fund is thematic in nature, it will be affected by the risks associated with the housing and its allied sectors. Investing in a thematic fund could involve potentially greater volatility and risk.
Key Features of the Scheme:
# Investment Objective: To provide long-term capital appreciation by investing predominantly in equity and equity-related instruments of entities engaged in and/or expected to benefit from the growth in housing and its allied business activities. There is no assurance that the investment objective of the scheme will be realized.
# Fund Manager: Srinivas Rao Ravuri
# Exit Load: Not applicable. The units under the plan cannot be directly redeemed with the Fund as the units will be listed on the stock exchange(s).
# Benchmark: India Housing and Allied Businesses Index.
# Minimum Application Amount/Number of Units: Rs 5,000 and in multiple of Rs10 thereafter.
On the rationale of launching the new scheme, Milind Barve, managing director, HDFC Asset Management Company, said, “There is a massive shortage of housing in India and this keeps increasing because of urbanization, nuclearisation of families and population growth. The affordability of houses has gone up due to lower interest rates. Housing is one theme but it encompasses multiple sectors/industries and provides an opportunity to a wide number of sectors/industries and companies. We believe given the government’s push towards affordable housing, this sector is poised to take off.”