HDFC Housing Opportunities Fund – Series 1 – NFO Review
Owning a house is everyone’s dream.
There is a lot of demand for housing in our growing economy.
Major Demand drivers for the housing sector are follows :
Increased Urbanisation : As per world bank in 2016 – 33% of the Indians lived in Urban areas, by 2030 this figure would rise to 45%. During the period – 12% of the young and growing population will shift to urban areas. The demand for housing in urban areas would be strong for next 15-20 years.
Government Intiatives : Modi government in 2015 launched a Mission “Housing for All by 2022”. The Pradhan Mantri Awas Yojna aims to provide affordable housing to low income groups.
The current developments in the housing sector seem to be going in the right way. The Government has started focusing on segment of affordable housing, where there is still a lot of demand for end use.
Favorable demographics – 66% of the Indian population is below 35 years of age.
Improved Affordability – As rates of Interest have declined and rise in disposable income, the affordability for houses below Rupees 30 lacs has increased.
Regulation : Real Estate is now regulated by RERA, which will bring in greater transparency and discipline
HDFC Mutual Fund has launched an NFO to capture the investment opportunities in the sector.
- Name of the Fund : HDFC Housing Opportunities Fund – Series -1
- Type : Close Ended Thematic Fund – 1140 days
- Dates : Opens on 16th Nov Closes on 30th Nov
- Fund Manager : Mr. Srinivas Rao Ravuri – he manages HDFC Growth Fund, HDFC Infrastructure Fund & HDFC Focussed Equity Fund.
The fund will invest 80-85% in Equities of housing & allied businesses, rest 15-20% will be invested in Debt and money market instruments.
Housing demand is expected to positively impact the following industries, which would provide attractive investment opportunities to investors :
- Engineering
- Construction
- Cement
- Wooden panels
- Adhesives
- Paints
- Light Electricals
- Tiles
- Sanitary ware
- Home Loans
- Home Appliances
Our Recommendation :
The Theme is promising and if you would like to give a tactical slant to your portfolio you can allocate less than 5% of your total portfolio. I would prefer it for SIP but the option won’t be there being a close ended fund.
Other Thematic Funds which we prefer – UTI Transportation & Logistics Fund & Sundaram Rural India Fund.
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