There are usually four phases in business cycles, namely expansion, peak, contraction, and slump. The HDFC Business Cycle Mutual Fund launched recently by HDFC Asset Management Company (AMC), intends to take a stock position in the expansion and peak phases. It may exit during the phases of contraction and slump. The scheme doesn’t have a lock-in period but it has an exit load of 1 per cent if the investment is redeemed within one year. According to HDFC AMC, this product is suitable for investors who are looking to receive long term-term capital appreciation or income. It is also ideal for individuals who are looking to invest predominantly in equity and equity-related instruments on business cycle-based themes.
The New Fund Offer (NFO) will be open from today, 11 November, to 25 November. HDFC Business Cycle Fund is an open-ended equity scheme and will be managed by Rahul Baijal. He holds an experience of over 21 years in equity research and fund management. HDFC Business Cycle Fund is going to manage funds by diversifying adequately across sectors/sub-sectors/market cap and across a number of stocks. The product positioning is going to change according to the variation in business cycles.
According to Rahul Baijal, HDFC Business Cycle Fund is going to offer a blend of top-down and bottom-up approaches for choosing companies which are positioned favourably in their business cycles with the intention to earn better risk-adjusted returns and help in the creation of wealth for the investors.
Read More: Check Which Government Bank Is Offering 7.25% Interest On Fixed Deposits
According to Navneet Munot, Managing Director and Chief Executive Officer of HDFC Asset Management, positioning portfolios well should be rewarding in this era of shortening of business cycles and increasing complexities. ” The launch of this NFO is a further step in the direction of being the wealth creator for every Indian,” he added.
HDFC will likely deploy 80 per cent of the fund’s capital starting in December. The fund intends to identify cycles in sub-sectors, and accordingly enter and exit positions.
