NFO Review: Tata Housing Opportunities Fund

Gourav Bidlans   /   August 23, 2022
Tata Housing Opportunities Fund

Tata Mutual Fund is launching a new fund offer (NFO) named Tata Housing Opportunities Fund. It is an open-ended, thematic equity scheme following the housing theme. The fund is offering a portfolio of businesses who are linked with the housing theme and performing well in their segment. Fund manager is aiming to invest in those companies or businesses that have potential and growth in the future.

According to the current market conditions, it creates good entry point for most of the companies in the sector. In long run, small cap and mid cap companies givebest results. An investor whose aim is to build wealth by investing for the long term can pursue Tata Housing opportunities Fund.

The risk-o-meter indicates very highrisk, because the investment will be going into equity and equity related instruments, so, investor who can higher appetite for risk can look at investing in this thematic fund.

Tata Housing Opportunities Fund details

  1. NFO opens: 16th August 2022 and closes 29th August 2022
  2. Open ended equity scheme following housing theme- Thematic fund
  3. Benchmark – NIFTY Housing Index (TRI)
  4. Long-term investing in equity and equity related instruments
  5. Regular Plan: This Plan is for investors who wish to route their investment through any distributor.
  6. Direct Plan: This Plan is only for investors who purchase /subscribe units in a scheme directly with the Fund and is not available for investors who route their investments through a Distributor.

Why to choose housing theme?

  1. In the past, the housing sector was impacted by the excess supply, NBFC crisis and Demonetisation. All businesses whichare connected with the housing sector like cement& cement products, construction material, consumer electronics, plywood boards, Engineering design & construction, Electric utilities and Glass-consumer have better chance for performing wellin future.
  2. Revival of housing demand along with increase in profitability of connected businesses. After pandemic the economy has been growing and the housing demand is increasing because of factors like improved affordability, and increased urbanization, which is pushing the housing sector up. This leads to increase in netprofits of connected businesses cement & cement products, other construction material, and consumer electronics.
  3. In current year, inflation is high, people have money in their hand, so spending of an average person will increase that will leads them to buy household products.

Investment strategy

The fund willinvest in multiple sectors and stocks related to housing theme that can beat the NIFTY Housing Index (TRI). Following are the businesses which are related to housing theme fund manager will invest in these businesses for generate capital appreciation.

  • Air Conditioner
  • Cables – Electricals
  • Cement
  • Cement Products
  • Consumer Electronics
  • Engineering Designing Construction
  • Furniture, Home Furnishing, Flooring
  • Glass-Consumer
  • Home Appliances, Housewares
  • Housing Finance
  • Paints
  • Plywood Boards, laminates
  • Residential/Commercial/SEZ projects
  • Power
  • Private Sector Bank
  • Public Sector Bank
  • Sanitary Ware
  • Steel
  • LPG/CNG/PNG/LNG Supplier
  • Any other basic industry which is forming part of the benchmark index

 Points to note

  1. There is high risk (rather volatility) involved because not always the sector and the stocks go hand in hand.
  2. Compulsory Reinvestment of Income Distribution Cum Capital Withdrawal – fund will reinvest the dividends which are incurred by invested, some companies gives dividend some doesn’t, so if investment gets dividend it will be reinvested, it also reduces the expenses of the scheme.
  3. Exit Load:
  • Redemption/Switch-out/SWP/STP on or before expiry of 365 days from the date of allotment: If the withdrawal amount or switched out amount is not more than 12% of the original cost of investment-NIL
  • Redemption/Switch-out/SWP/STP on or before expiry of 365 days from the date of allotment: If the withdrawal amount or switched out amount is more than 12% of the original cost of investment-1%
  • Redemption/Switch-out/SWP/STP after expiry of 365 days from the date of allotment-NIL

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