HDFC Asset Management Company Ltd. (HDFC AMC) has announced the launch of HDFC Business Cycle Fund with the aim to invest in businesses likely on the cusp/midst of a favourable business cycle. The captioned new fund offer (NFO) will open on November 11, 2022, and close on November 25, 2022.
The scheme will be managed by Rahul Baijal, who has over 20 years of experience in fund management and equity research.
About business cycle funds
Business Cycle investing enjoys benefits, such as higher confidence on 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.
About HDFC Business Cycle Fund
According to Rahul Baijal, HDFC Business Cycle Fund will bring 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 health of the banking and real estate sector, increasing investments by corporates bode well for equities over 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," he said.
Investment strategy
HDFC Business Cycle Fund will manage risks by being adequately diversified across sectors /sub sectors/market cap, and across number of stocks. It is therefore a well-diversified fund suitable for long term investments via both lumpsum and SIP.
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 assessment of stages of business cycles, and with an investment horizon of 3 or more years, according to HDFC AMC.
