ICICI Prudential Mutual Fund has announced the launch of its Housing Opportunities Fund, an open-ended equity scheme that will invest in companies engaged in and/or expected to benefit from the growth in housing theme. The new fund offer (NFO) for ICICI Prudential Housing Opportunities Fund will open for subscription on 28 March and close on 11 April.
The scheme will invest in basic eligible industries that form a part of the Nifty Housing Index. Housing as a theme encapsulates various sectors such as cement, consumer electronics, housing finance, banks, power, steel, LPG/CNG/PNG/LNG supplier, etc.
As per the fund house, housing as a theme seems to be poised for a turnaround as the real estate oversupply of 2008-2012 appears to be digested.
“This may lead to less pressure on real estate prices thereby aiding housing as a theme to perform better. With the number of Indians living in urban areas expected to reach 525 million by 2025 and 600 million by 2036, the real estate sector in India is expected to reach $1 trillion by 2030. The early signs of this is visible in the healthy growth of housing sales volume (across seven major cities) which surged 113% YoY, signifying healthy recovery post lockdown," the fund house said in a release.
The company also believed that the residential sector is expected to receive a boost under the Pradhan Mantri Awas Yojana (PMAY) scheme. Also, the segment is an attractively valued post going through a time correction since 2013.
The scheme is suitable for investors looking for opportunities to participate in the potential growth of housing theme in the country. Veteran fund manager S Naren and Anand Sharma will be the fund managers of the Scheme. The benchmark of the scheme is Nifty Housing Total Return Index (TRI).
The minimum application amount at the time of the NFO period is ?5,000 and the multiples of Re 1, thereafter. Chintan Haria, head-product development and strategy, ICICI Prudential AMC said, "Housing as a theme, we believe is at the cusp of a strong cycle. India’s favorable demographics, growing middle-class population, increased urbanization, better affordability and lower home loan interest rates are creating a conducive environment for housing and allied themes."
