HDFC Business Cycle Fund: New fund offers a chance to grow wealth with rising companies. Check details

HDFC Asset Management Company (AMC) has announced the launch of HDFC Business Cycle Fund,  which aims to invest in businesses likely on the cusp of a favourable business cycle. The NFO opens on November 11, 2022, and closes on November 25, 2022.

In a statement, HDFC AMC said just how GPS enables us to choose better routes to reach our destination faster, and avoid routes with obstructions, HDFC Business Cycle Fund aims to achieve better investment outcomes by investing in companies likely to enjoy favourable business cycles while avoiding companies about to enter in a business downcycle. 

Benefits

HDFC Business Cycle Fund is an open-ended equity scheme following a business cycle-based investing theme. 

According to the AMC, Business Cycle investing enjoys benefits, such as higher confidence in business cycle forecasts vs economic cycle forecasts. In business upcycles, investors may gain from dual benefits of earnings growth and improvement in valuations. In business cycle investing, one needs an agile investment strategy that dynamically rotates investments based on assessment of stages of business cycles.

Also Read: Mutual Funds: Business cycle funds a tactical play

“In an era marked by increasing complexities and shortening of business cycles, positioning portfolios well should be rewarding. HDFC AMC aims to support investors to stay ahead by using a blend of top-down and bottom-up approach, leveraging strengths in its research and fund management team. The launch of this NFO is a further step in the direction of being the wealth creator for every Indian,” Navneet Munot, Managing Director and Chief Executive Officer, HDFC AMC, said.

Fund manager 

HDFC Business Cycle Fund will be managed by Rahul Baijal, who has over 20 years of experience in Fund Management and equity research.  

Commenting on the NFO, Baijal said, “HDFC Business Cycle Fund brings a blend of top-down and bottom-up approach towards picking companies positioned favourably in their business cycles, with the aim to achieve better risk-adjusted returns and aid wealth creation for investors. India is expected to be among the fastest-growing large economies, and strong fundamentals hold us in good stead in a global environment of rising risks.”

“Factors such as improving the health of the banking and real estate sector, increasing investments by corporates bode well for equities over the medium to long term. We believe that investing in the business cycle fund could be a good allocation strategy and the fund could be held by investors for long periods of time,” said Baijal.

Also Read: New mutual fund schemes from HDFC AMC provide exposure to growing IT sector and Private Banks. Details

Who should invest?

HDFC Business Cycle Fund will manage risks by being adequately diversified across sectors/sub-sectors/market cap, and across a number of stocks. It may be suitable for long-term investments via lumpsum and SIP. 

The AMC said that investors may consider this product to gain exposure to businesses likely on the cusp/midst of favourable business cycles, via a fund that is agile in rotation of investments based on an assessment of stages of business cycles, and with an investment horizon of 3 or more years.

(Disclaimer: Views expressed above are those of the HDFC AMC and respective commentators. Mutual fund investments are subject to market risks. There is no assurance or guarantee that the scheme objectives will be met. Please consult your financial advisor before investing in this fund)