HDFC Business Cycle Fund

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hdfc business cycle fund

HDFC Business Cycle Fund aims to invest in businesses likely on the cusp / midst of a favourable business cycle

What is Business Cycle?

Business cycle is the journey across four phases of growth in business activity, observed in acceleration / deceleration across factors such as volume growth, pricing power, competitive intensity, cost consciousness, capex intensity, ROCE and business sentiment.

This product is suitable for investors who are seeking

  • To generate long-term capital appreciation/ income via investment predominantly in equity & equity related instruments related to the business cycle theme.
  • To take advantage of having higher exposure to businesses and companies at the “cusp of acceleration / midst” of high earnings growth as they are about to enter/ are in a high growth phase.
  • Investment horizon 3 or more years

Why Does Business Cycle Investing Make Sense?

Higher confidence on forecasts

Estimating positioning of various business cycles and their trajectory can be done with higher confidence vs the general economic cycle

Correlation with valuations

When businesses are in upcycle, investors get dual benefit of earnings growth and improvement in valuation multiples

Investment Strategy

Invest in businesses likely on the cusp/midst of favorable business upcycle, avoid businesses about to enter/in a downcycle

Ahead of the curve

Based on lead indicators, domain expertise and recurring patterns in business history - Investing opportunities can be identified ahead of time

Agility

Investments across companies and themes are not static in nature and can be rotated based on stages of business cycles.

Portfolio Strategy - HDFC Business Cycle Fund

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Blend of top down and bottom up approach

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Core of portfolio (>80%) would be companies likely on the cusp / midst of favorable business cycle, while avoiding companies about to enter/in a business downcycle

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Investment across large, mid and small caps

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Benchmark: Nifty 500 TRI

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Optimally diversified across number of stocks

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Non-core (<20%) portfolio would consist of
1) growth stories relatively agnostic to the business cycle 2) stocks relatively better positioned within their sector 3) tactical opportunities with favorable risk-reward

Past performance of old-running NFO Schemes

Look at the Immense Growth in HDFC NFO

The value of 1 lakh Invested during HDFC NFO and the Present Valuation

On Going Business Cycle Funds
  Launch Date Launch NAV Current NAV CAGR Return Action
L&T Business Cycle Fund Reg Gr 20-08-2014 10 24.72 11.33% Invest Now
 
ICICI Prudential Business Cycle Fund Reg Fr 05-01-2021 10 13.89 19.51% Invest Now
 
HDFC Business Cycle Fund Reg Gr 25-01-2022* 10* 10* Starting at Rs 10* Invest Now
* NFO Period Last Date NAV
All data as on 22-11-2022
All data is given for illustrative purposes only.

Who should consider investing?

This product may be suitable for investors who are looking for-
  • Exposure to businesses likely on the cusp / midst of a favourable business cycle
  • A fund that is agile in rotation of investments based on assessment of stages of business cycles
  • A product suitable for buy and hold / SIP for long periods of time.
  • Investment horizon of 3 or more years

HDFC Business Cycle Fund aims to leverage strengths in its research and fund management team to manage funds based on outlook on business cycles

It is quite easy to invest in HDFC Business Cycle Fund through Swaraj FinPro
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