Tata Mutual Fund announces the launch of Tata Housing Opportunities Fund - an open-ended Equity Scheme following housing theme. The New Fund Offer (NFO) opens on 16th August 2022 and will close on 29th August 2022.
A better way to invest is to find companies whose products we like and use. One of the places that we spend the most amount of money on is our house. Think about all the things that go into making a home - cement, steel, paints, tiles, electricals, plumbing, bathware, etc. A number of companies that make these products are listed in the Indian equity market. Most of these are good quality businesses that offer reasonable growth prospects as well. Thus, the housing theme offers a good long term investment opportunity.
Tata Housing Opportunities Fund is an open-ended fund that will invest in a portfolio of companies that mainly supply the materials, products, and services that go into building a house. This is an opportunity to potentially create wealth for your future, by investing in companies whose products you may purchase.
Speaking at the launch, fund manager Tejas Gutka who will be managing this fund said that "A house is one of the most cherished investments that we make. And this could be an opportunity to potentially generate long term wealth from such investments. This is a more structural offering rather than a time-bound tactical portfolio. Many of the companies that fit into this theme also benefit from the demographic dividend of our country in the form of a rising per-capita income, increasing urbanization, rising middle class, nuclear families, young and educated workforce etc. Thus, the portfolio would qualify as a good long-term investment."
"The NIFTY Housing Index (TRI) - is broader, in the sense that it has a wider industry classification. In our view, some of these businesses are indirect beneficiaries of the real estate sector. A large part of our portfolio is expected to be a direct beneficiary of a housing up-cycle and as such, our portfolio will have a reasonable divergence from the benchmark. We will thus focus on more bottom-up stock selection based on our research framework. The overall portfolio will be guided by our house philosophy of Growth-At-A-Reasonable-Price (GARP)”.
Anand Vardarajan, Business Head – Banking, Alternate Products & Product Strategy shares his perspective at the launch, The housing sector has gone through almost a decade long underperformance with both price and time correction. The 2007 -08 of real estate and infra boom was led by a lot of speculative interest rather than end user demand. The sector subsequently went through a long period of consolidation with the regulatory environment getting strengthened with RERA, deleveraging by large developers, consolidation of the smaller players with larger ones. Lower interest rates, lack of supply, higher affordability and absorption and benign price environment led to increase in end user demand which got further accelerated in a post covid world with hybrid working and need for more space. While the setup looks good for what looks like a start of a new cycle for housing, the demand drivers for the underlying themes that convert a house into a home like paints, pipes, plywood, tiles etc. have been strong and may benefit even more from a tailwinded environment. Tata Housing Opportunities Fund aims to capture that entire value chain by taking exposure through a single fund.``
