HDFC Asset Management Company has launched HDFC Business Cycle Fund, which aims to invest in businesses during favorable business cycles. NFO will be open from 11th November to 25th November Investment Objective
To provide long-term capital appreciation by investing predominantly in equity and equity related securities with a focus on riding business cycles through dynamic allocation between various sectors and stocks at various stages of business cycles.
Investment Strategies
According to the fund house, HDFC Business Cycle Fund will seek to achieve better investment results by investing in companies that are likely to enjoy favorable business cycles, while avoiding companies that enter into business cycles of decline.
Business cycle investing yields advantages, such as higher confidence in business cycle forecasts than in economic cycle forecasts. In business downturns, investors can benefit from the twin benefits of earnings growth and valuation improvements. In this type of investing, one needs an agile investment strategy that dynamically rotates investments based on an assessment of the phases of business cycles.
CEO of the AMC said, “In an era of increasing complexities and shortening business cycles, well-established portfolio should be a rewarding activity. HDFC AMC aims to help investors stay ahead by leveraging the strengths in its research and fund management team, using a mix of top-down and bottom-up approach. The launch of this NFO is another step towards creating wealth for every Indian."
The scheme will be managed by Rahul Baijal, who has over 20 years of experience in fund management and equity research.
Fund manager said, “We have looked at business cycles throughout history and how they affect fundamentals. India is expected to be one of the fastest growing large economies, and strong fundamentals protect us from rising risks globally. atmosphere. Factors such as recovery in the health of the banking and real estate sectors, increased investment by corporates augurs well for equities in the medium to long term. We believe investing in Business Cycle Fund can be a good allocation strategy and keep the fund with the investors for a long period of time."
HDFC Business Cycle Fund will manage risks by being adequately diversified across sectors, sub sectors or market capitalizations, and across number of stocks.
Benchmark
Nifty500 TRI (Total Returns Index)
Asset Allocation
Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows:
Types of Instruments | Min/Max Allocation (%) | Risk Profile |
Equity and Equity related instruments of Business cycle-based theme companies | 80-100 | High to Very High |
Equity and Equity related instruments of companies other than above | 0-20 | High to Very High |
Units of REITs and InvITs | 0-10 | Medium to High |
Debt securities*, money market instruments and Fixed Income Derivatives | 0-20 | Low to Medium |
Units of Mutual Fund@ | 0-20 | Low to High |
NFO Details
Scheme Opens | 11th Nov 2022 |
Scheme Closes | 25th Nov 2022 |
Scheme reopen for continuous purchase/sale | scheme will reopen for continuous purchase/sale within five business days from the date of allotment |
Investment Objective | To provide long-term capital appreciation by investing predominantly in equity and equity related securities with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles |
Fund Manager | Mr. Rahul Baijal |
Entry Load | Nil |
Exit Load | • In respect of each purchase/switch-in of units, an Exit load of 1% is payable if units are redeemed/switched-out within 1 year from the date of allotment. • No Exit Load is payable if units are redeemed / switched-out after 1 year from the date of allotment. • No Entry / Exit Load shall be levied on bonus units and Units allotted on Re-investment of Income Distribution cum Capital Withdrawal. • In respect of Systematic Transactions such as SIP, GSIP, Flex SIP, STP, Flex STP, Swing STP, Exit Load, if any, prevailing on the date of registration / enrolment shall be levied. |
Options | Regular and Direct Plans offer the following sub-options: a) Growth Option b) Income Distribution cum Capital Withdrawal (IDCW) Option. IDCW option offers following Sub-Options / facilities: a) Payout of IDCW Option / facility and b) Re-investment of IDCW Option / facility |
Benchmark Index | NIFTY 500 TRI (Total Returns Index) |
Minimum Application Amount | During NFO Period: Purchase: Rs. 100/- and any amount thereafter During continuous offer period (after scheme re-opens for repurchase and sale): Purchase and additional purchase: Rs. 100/- and any amount thereafter Note: Allotment of units will be done after deduction of applicable stamp duty and transaction charges, if any. |
Performance of existing Multicap Funds
Here is the performance of some existing business cycle funds. This would give an idea to investors on how these funds have performed in medium to long term. Returns indicated here are annualized returns.
Scheme | Launch | 6 Mth Ret (%) | 1 Yr. Ret (%) | 3 Yr. Ret (%) | Click to see latest performance |
TATA Business cycle | Aug-21 | 18.85 | 8.89 | -- | |
L&T Business cycle | Aug-14 | 17.83 | 2.12 | 16.64 | |
ABSL Business cycle | Dec-21 | 14.67 | -- | -- | |
ICICI Pru Business cycle | Jan-21 | 14.55 | 6.46 | -- | |
Kotak Business cycle | Sep-22 | -- | -- | -- | Click here |
Returns as on 11-Nov-2022
Suitability
This product is suitable for investors who are seeking*
HDFC Business Cycle Fund may be suitable for investors who are looking for long-term capital growth through “investment in portfolio of predominantly equity and equity-related securities of companies with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles in the economy.”
However, there is no guarantee that the scheme’s objectives will be met.
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*Investors should consult their financial advisors if in doubt about whether the product is suitable for them
Note: The above information has been sourced from the Scheme Information Document provided by HDFC Asset Management. Read the entire document before investing, Disclaimer: Jaiprakash (ARN/Distributor - 70524; brand name Vasundhra Investment) is the distributor of the mutual fund. Please consult your investment advisor before investing
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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