What’s on offer: HDFC Mutual Fund has reopened the HDFC BSE REITs and Commercial Real Estate Index Fund for ongoing subscription from September 28 after the completion of its NFO. The open-ended index fund will track the BSE REITs and Commercial Real Estate Index.
The fund gives investors exposure to listed real estate investment trusts (REITs) and select commercial real estate companies with rental-income-linked business models. REITs allow investors to participate in income-generating commercial real estate through listed securities rather than directly purchasing or managing properties.
What does it mean for investors?
The fund provides a relatively accessible way to add commercial real estate exposure to a portfolio through the mutual fund route. Since it is an index fund, investors are not relying on the fund manager to actively select individual stocks. The objective is to replicate the underlying index, subject to tracking error and expenses.
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HDFC BSE REITs & Commercial Real Estate Index Fund
| Feature | Details |
|---|---|
| Fund type | Open-ended index fund |
| Subscription | Ongoing from September 28 |
| Benchmark | BSE REITs and Commercial Real Estate Index |
| Investment focus | Listed REITs and select commercial real estate companies |
| Strategy | Passive — aims to track the underlying index |
| Investor exposure | Commercial real estate through listed securities |
| Key factors affecting returns | Rental income, occupancy, property valuations, interest rates and market conditions |
| Key risk | Market-linked; no assured rental income or guaranteed returns |
| Suitable for | Investors seeking commercial real estate exposure through mutual funds |
This also means returns will depend largely on the performance of the securities in the index. Investors should not treat the fund as equivalent to owning physical property or as a source of guaranteed rental income.
REIT and commercial real estate valuations can be affected by interest rates, borrowing costs, occupancy levels, rental trends, property valuations, economic growth and broader equity-market conditions.
For investors, the fund may therefore be relevant if they want market-linked exposure to India’s commercial real estate segment and are comfortable with the associated equity-market risks. It should be considered as part of overall asset allocation rather than a substitute for traditional fixed-income or direct-property investments.
HDFC AMC MD and CEO Navneet Munot said the fund is intended to provide access to India’s real estate growth opportunity through an index-fund format.
ICICI Prudential Contra Fund
NFO period: September 28 to October 12
Strategy: Contrarian equity investing
ICICI Prudential Mutual Fund has launched the ICICI Prudential Contra Fund, an open-ended equity scheme that will invest in companies or sectors that are out of favour with investors or where the fund manager believes market prices do not fully reflect their potential.
The fund will be managed by Sankaran Naren, Dharmesh Kakkad, Sakshat Goel and Gaurav Chikane.
What does it mean for investors?
The fund is designed for investors willing to take a long-term view on unpopular or underperforming stocks and sectors. Its investment process will use the fund house’s VCTS framework — Valuations, business Cycle, Triggers and Sentiment — to identify potential contrarian opportunities.
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The portfolio construction process will follow the CLOUD approach: Calculate, Leverage, Ownership, Upside and Disruption. The fund house says it will examine factors such as valuations, debt levels, institutional ownership, earnings normalisation and investor sentiment.
ICICI Prudential Contra Fund
| Feature | Details |
|---|---|
| Fund type | Open-ended equity scheme |
| NFO period | September 28 to October 12 |
| Investment focus | Out-of-favour companies and sectors |
| Strategy | Contrarian investing |
| Investment framework | VCTS — Valuations, Business Cycle, Triggers and Sentiment |
| Portfolio framework | CLOUD — Calculate, Leverage, Ownership, Upside, Disruption |
| Market-cap approach | Flexible across market capitalisations |
| Fund managers | Sankaran Naren, Dharmesh Kakkad, Sakshat Goel and Gaurav Chikane |
| Key risk | Contrarian bets may remain out of favour and underperform for an extended period |
| Suitable for | Long-term investors willing to wait for a contrarian investment thesis to play out |
The key point for investors is that a contrarian thesis can take time to play out. A stock may remain out of favour or underperform for an extended period before the factors supporting a recovery emerge. The strategy can also lead to positions that differ significantly from prevailing market sentiment.
According to ICICI Prudential MF, investments may be exited when the perceived mispricing disappears, sentiment changes or another opportunity offers a stronger investment case.
The scheme is therefore aimed at long-term investors who can tolerate periods of underperformance while waiting for the investment thesis to materialise. The fund house’s observations about underperforming sectors and potential opportunities are its investment rationale and do not guarantee future outperformance.
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Disclaimer: Business Today provides market and personal news for informational purposes only and should not be construed as investment advice. All mutual fund investments are subject to market risks. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
