A man carries a briefcase while walking down Wall Street near the New York Stock Exchange (Photographer: Michael Nagle/Bloomberg)

New Mutual Fund Offers Ahead Of GST

Mutual fund houses are betting on big on the Goods and Services Tax (GST) just days ahead of its implementation on July 1, and the expected recovery in the economy with the launch of new fund offers.

HDFC Mutual Fund, Birla Sun Life Mutual Fund and ICICI Prudential Mutual Fund have launched equity schemes, which will be close-ended funds with tenure of up to three and a half years.

HDFC Equity Opportunities Fund (Series II)

This is a closed-ended equity scheme aimed at capital appreciation over 1,100 days and can be subscribed between June 27 and July 11.

The fund will look to limit downside by purchasing Nifty 50 put options with around three-year term at a strike price around current market levels.

Key Investment Themes:

  • Corporate lending
  • Recovery in capex cycle
  • GST implementation

The scheme is betting on the government’s focus on roads, railways, affordable housing along with recovery in the capital expenditure cycle, and the shift from unorganised to organised sector on account of implementation of GST.

Birla Sun Life Resurgent India Fund – Series 4

This is a closed-ended equity scheme with duration of 3.5 years open to subscription from June 23 to July 7.

The fund house aims to invest in stocks that are likely to benefit from recovery in the Indian economy.

Key Investment Themes:

  • GST
  • Macroeconomic stability in India
  • Government focus on infrastructure

Sectors related to affordable housing, infrastructure, auto ancillaries, and the entire consumer space will be the key focus areas of the fund.

ICICI Prudential Value Fund – Series 15

The 1,299-day tenure closed-ended fund is open for subscription from June 27 to July 11.

The fund aims to limit downside by using hedging strategies and counter-cyclical investment approach.

Key Investment Themes:

  • GST will increase equity participation
  • Infrastructure
  • Corporate lending
  • Contrarian approach to pharma sector

As per the scheme document, some of the sectors to focus on would be construction, transportation, corporate lenders and pharmaceuticals.