ICICI Prudential Mutual Fund launched a new fund offer (NFO) for housing opportunities fund. The fund offer opened on March 28 and will close on April 11.
The scheme will aim to invest in basic eligible themes that form a part of Nifty Housing index. The index includes businesses engaged in activities considered under the housing theme including cement and cement products, consumer electronics, paints, steel, home appliances and sanitary ware.
The index constituents are financial services (25.8 percent), consumer goods (17.3 percent), cement & cement products (16.1 percent), construction (13.3 percent), power (11.4 percent), metals (10.9 percent) and oil & gas (5.2 percent).
The top 10 stocks are Larsen and Toubro, Asian Paints, HDFC Bank, ICICI Bank, Tata Steel, Ultratech Cement, Housing Development Finance Corporation, Adani Green Energy, NTPC and Grasim Industries.
It is an open-ended equity scheme following housing theme. The minimum application amount is ₹5,000 and minimum additional application amount is ₹1,000. The exit load is one percent of applicable NAV when redeemed in less than one month and nil after that.
Key details about the NFO
| Minimum amount | ₹5,000 (plus in multiples of Re 1) |
| Additional application | ₹1,000 (plus in multiples of Re 1) |
| Exit load | 1 percent of NAV (during first one month) |
| Benchmark | Nifty Housing TRI |
The AMC pitches the housing sector as signifying growth by claiming that real estate sector in India is expected to reach US $1 trillion by 2030.
By 2025, it may contribute 13 percent to the country’s GDP, states the AMC. Also, housing sales volume across seven major cities in India surged 113 percent y-o-y, signifying healthy recovery post lockdown, the fund house states.
The asset management company (AMC) woos investors by saying the housing theme addresses the basic need of an individual, and also that the cycle for housing theme is about to turn. The fund house document also highlights that India's favourable demographics, urbanisation trend, better affordability and lower rates are creating a conducive environment.
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Besides, government's growing thrust towards housing further gives impetus to the theme. It is vital to note that housing doesn't only imply real estate and construction, but it also includes industries like banks, steel and power, etc.
The benchmark index is Nifty Housing TRI. The scheme is suitable for investors who are seeking long term capital appreciation and those who are looking forward to opportunities to participate in potential growth of housing theme.
The SIP can be daily weekly fortnightly and monthly of ₹100 with a minimum of six instalments. There can also be quarterly SIPs of ₹5,000 with a minimum of four instalments.