HDFC Mutual Fund launches India's first domestic fund focusing on the realty sector

HDFC Mutual Fund has introduced India's pioneering domestic fund focusing on the realty sector with the launch of HDFC Nifty Realty Index Fund. This open-ended scheme tracks the Nifty Realty Total Return Index (TRI), offering investors exposure to a diverse portfolio of real estate stocks through a single instrument, thereby alleviating the need for individual stock selection.

The new fund offer (NFO) for HDFC Nifty Realty Index Fund commenced on March 7 and is scheduled to conclude on March 21.

Highlighting the potential for long-term growth within the realty sector, HDFC Mutual Fund, ranked as India's third-largest asset management company (AMC) in terms of assets, emphasizes the significant development across various segments including residential, commercial, retail, hospitality, and SEZ projects.

Navneet Munot, Managing Director and Chief Executive Officer of HDFC Asset Management Company, remarked, "At HDFC Mutual Fund, our mission to be the wealth creator for every Indian continues to drive us to offer a wide range of investment solutions to meet the needs of investors."

The HDFC Nifty Realty Index Fund functions as a passive fund, investing in stocks constituting the Nifty Realty index. The fund managers overseeing the scheme are Nirman Morakhia and Arun Agarwal, with a minimum investment requirement of Rs 100 during both the NFO period and continuous offer period.

The Nifty Realty Index presently comprises 10 constituents, with DLF holding the highest weightage at 29.2 percent, followed by Macrotech Developers (14.1 percent), Godrej Properties (13.8 percent), Phoenix Mills (12.9 percent), and Prestige Estates Projects (8.2 percent).

While the launch of this specialized fund offers investors a unique avenue for realty sector exposure, financial advisors caution retail investors about the inherent risks associated with sectoral or thematic funds. They advise beginners in equity investing to start with diversified equity funds for a more balanced approach.