HDFC Mutual Fund Announces Launch Of Non-Cyclical Consumer Fund, NFO Opens On June 23

HDFC Mutual Fund has announced the launch of an open-ended scheme designed to tap into India’s thriving consumption sectors. The new fund offer (NFO) of HDFC Non-Cyclical Consumer Fund will open on June 23, 2023, and close on July 7, 2023.

The minimum application amount is Rs. 100 with the option to invest any amount thereafter.

With a focus on bottom-up stock selection, the fund aims to construct a portfolio that encompasses various non-cyclical themes within industries like consumer goods and services, telecom, healthcare, media, entertainment, and publication.

What Is Non-Cyclical Theme

These stocks are supposed to have good resilience to economic fluctuations, consistently outperforming the market even during periods of slow economic growth. The demand for non-cyclical products is expected to remain relatively constant regardless of the economic climate.

Asset Allocation

The HDFC Non-Cyclical Consumer Fund will allocate at least 80 per cent of its core portfolio to stocks representing the non-cyclical consumer theme in above mentioned industries.

The non-cyclical consumer universe of this fund comprises over 300 companies with market capitalisation exceeding Rs 500 crore. The fund will invest across market cap segments, such as large-, mid-, and small-caps. It will also diversify within the consumer sectors and sub sectors, HDFC Mutual Fund said in a release.

Amit Sinha, fund manager, equity and senior equity analyst, dealing and investment, HDFC Asset Management Company, said the stable demand for non-cyclical consumer goods and services will remain throughout different phases of the economic cycle. The fund aims to identify companies with high market share or those gaining share through superior execution, scale, technology, and more, he said.

Navneet Munot, managing director and chief executive officer, HDFC AMC said that as India enters Amritkaal, the consumption sector finds itself at an inflection point. Factors such as India’s GDP per capita surpassing $2,000, demographic dividend and digitisation are expected to drive growth in this sector, he said.

Risk Of The Scheme

HDFC Mutual Fund said that the scheme has been designated in the ‘very high risk’ category due to its investment in equities, which accounts for 80 per cent of the assets. The fund is suitable for individuals seeking long-term capital appreciation.