The HDFC Housing Opportunities Fund is an open-ended equity scheme designed to provide long-term capital appreciation. The fund’s overall risk profile is very high and is suited to investors who are not averse to risks in investment as long as the yields are high. However, the investor has to look at the long-term perspectives and stay invested in the fund for three years or more to reap optimal benefits and pursue wealth creation.Read more
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The HDFC Housing Opportunities Fund is a relatively new scheme launched only in December 2017 to provide investment opportunities in a high-risk volatile equity market to acquire an impressive AUM as of 30 April 2021 at Rs. 1771.81 crores. Its asset allocation is designed to achieve the fund objectives.
The fund allocates 80 to 100% assets in high-risk equities and related instruments in housing and allied activities, up to 20% in high-risk equities other than housing, up to 20% in low to medium risk debt and money market instruments, and up to 10% in medium to high-risk REIT and InVIT units.
The HDFC Housing Opportunities Fund’s Market Cap Exposure indicates its investment strategy to tap the potentially high yielding equities and equity-related instruments. Accordingly, its exposure in percentage points to the NAV is 77.12 in Large Cap, 3.18 in Mid Cap, and 13.37 in Small-Cap equities.
The top holdings adding up to nearly 70% of the asset value as of 31 March 2021, are cornered by L&T (9.68%), HDFC Bank (9.50%), ICICI Bank (8.17%), NTPC (7.89%), SBI (7.81%), HDFC Ltd (6.98%), and Ambuja Cements (6.93%), to name a few.
The HDFC Housing Opportunities Fund offers the following plans and options to the investor to choose from:
HDFC Housing Opportunities Fund Regular
HDFC Housing Opportunities Fund Direct
**The difference in the two options lies in the source of purchase, either from the Fund House directly or from the distributor for the regular option.
**The abbreviated form of Income Distribution and Capital Withdrawal is IDCW. The dividend is declared out of the distributable surplus. The two versions are payout and reinvestment.
**By default option Growth is selected if no option is specified.
** IDCW payout is the default option if reinvestment is not specified.
|Fund Name||HDFC Housing Opportunities Fund in Regular and Direct Plan Options|
|Fund House||HDFC Asset Management Company. It is known as HDFC Mutual Fund also|
|Launch Date||6 December 2017|
|Scheme Category||Thematic Fund|
|Scheme Type||Open-ended equity scheme following housing and allied activities theme|
|AUM||Rs. 1771.81 as of 30 April 2021|
|Benchmark||India Housing & Allied Businesses Index (Total Returns Index)|
|Application Investment||Minimum: Rs.5000 Additional: Any amount in multiples of Rs.1000 after that|
|Entry Load||Not applicable|
|Exit Load||Applicable only after the conversion of the fund to open-ended on 19 January 2021
|Risk Grade||Not available|
|Return Grade||Not available|
|Risk Level||Very High|
The HDFC Housing Opportunities Fund aims to generate income and capital appreciation in the long term by sticking to its thematic fund attributes. The asset allocation is dominated by equity and related instruments in entities engaged in housing and allied activities, implying that they reap the benefits from the ever-growing demand in housing and allied businesses in India.
By nature, investment in equities carries high risk but at the same time delivers the highest yields. The HDFC Housing Opportunities Fund has thus been tagged with a Very High-Risk profile and it suits the investors looking for capital appreciation in the long term regardless of the risk involved. Accordingly, the minimum suggested time horizon is three years.
The asset allocation strategy adopted by the fund is focused on high-worth blue-chip equities of giants in the construction and the banking sector primarily. While every endeavour is made to achieve the fund objectives, its success is not guaranteed, and hence, there is no guarantee of consistent returns.
|Period||Return %||Benchmark Returns %|
|Last 1 year||67.47||90.91|
|Last 3 years||3.36||14.37|
|Period||Return %||Benchmark Returns %|
|Last 1 year||68.50||90.91|
|Last 3 years||4.37||14.37|
|Higher liquidity is ensured as the fund is an open-ended scheme
Investment in housing and allied business equities aims for higher yields
Offers investment flexibility in lump sum and SIP
Exit load is only 1% for switch-out and redemption within one year of purchase
|Fund’s risk profile is very high, and investors with a matching profile can invest|
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Some of the critical benefits accrued out of the HDFC Housing Opportunities Fund are:
Let us check out the tax provision that may impact the income generated from the HDFC Housing Opportunities Fund:
Investors attribute much weight to the Fund House offering a Mutual Fund scheme. As is quite evident, the HDFC Housing Opportunities Fund was promoted by the HDFC Asset Management Company (AMC).
The company is often referred to as the HDFC Mutual Fund. It is a subsidiary of the HDFC Group, a conglomerate engaged in varied financial services covering Banking, Insurance, Housing and Education Finance, and Mutual Fund.
The Fund house has emerged as a market leader in the Mutual Fund market, holding an asset value of Rs.4.1 trillion in 9.1 million retail and institutional accounts.
The Fund house was established in 1999 as a joint venture enterprise comprising HDFC Ltd and Standard Life Investments, based in the UK. After the company went public through the IPO route in August 2018, the company shareholding pattern has changed.
As of today, the primary stakeholders of the HDFC AMC are:
The HDFC Housing Opportunities Fund design is such that the investors with a high-risk profile matching the fund risk profile will only allocate funds in the portfolio. The portfolio is confined in a narrow investment focus aligned with the equity theme and can only attract investors looking to create wealth in the long term with a horizon exceeding three years.
Accordingly, the indicative list below describes the prospective investors in the HDFC Housing Opportunities Fund:
Investors in the HDFC Housing Opportunities Fund have to factor in the thematic asset allocation in the portfolio for capital appreciation and wealth creation in the long term. The investment objective and strategy adopted confines asset allocation in equities in entities engaged in housing and allied business activities to reap dividends from the growing housing demand in India.
However, the very high-risk profile assigned to the fund precludes investors who do not wield a similar profile. In this context, the suggested time horizon is a minimum of three years to corner the expected high yields for wealth creation.
*All savings are provided by the insurer as per the IRDAI approved insurance
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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