Mahindra Manulife Mutual Fund will launch the Mahindra Manulife Business Cycle Fund today, August 21, 2023, an open-ended equity scheme that follows a business cycle-based investment theme, the fund house said.
The New Fund Offer (NFO) is available till September 4, 2023. The fund's benchmark index will be the NIFTY 500 TRI, consisting of the top 500 companies listed on NIFTY. The minimum subscription amount for lumpsum investment is Rs 1,000, and thereafter in multiples of Re 1.
Portfolio Allocation
The fund aims to allocate a minimum of 80 per cent and a maximum of 100 per cent of its assets to equity and equity-related instruments of companies chosen based on the business cycle theme. The remaining 20 per cent can be invested in equity and equity-related instruments of companies outside this theme or in debt and money market securities.
Investment Philosophy
The portfolio's allocation focuses on quality companies during favourable business cycles, the Mahindra Manulife MF said. The fund will focus on select sectors aligned with the business cycles and invest across different market capitalisations. The release states that the fund may allocate more to defensive sectors during economic downturns to bolster portfolio stability.
What is Business Cycle Fund?
Business cycle funds target stocks or sectors that stand to gain from economic recovery. From a financial market perspective, a business cycle entails evaluating both the economic and market cycles.
The release says that historical market data showcases instances where these cycles either converge or diverge, creating wealth-building opportunities. Keen monitoring can help identify such prospects.
The AMC claims that the fund is designed to strategically rotate sectoral allocation, aiming to capture outperformance during specific business cycle phases.
Investors should note that a 1 per cent exit load is applicable if units are redeemed or switched out within three months from the date of allotment.
