Invesco Mutual Fund on February 6, 2025 launched the Invesco India Business Cycle Fund, an open-ended equity scheme following business cycles-based investing theme.
Invesco Mutual Fund has launched the Invesco India Business Cycle Fund, an open-ended equity scheme focused on business cycle-based investing. The scheme will be benchmarked against the Nifty 500 TRI. Minimum subscription is Rs 1,000
Invesco Mutual Fund on February 6, 2025 launched the Invesco India Business Cycle Fund, an open-ended equity scheme following business cycles-based investing theme.
The new fund offer (NFO) opened on February 6 and will remain open for subscription till February 20, 2025. The scheme will reopen for continuous purchase and redemption within five business days from the date of allotment. The scheme will track the Nifty 500 TRI (Total Return Index) as its benchmark.
Investors can start with a minimum investment of Rs 1,000, with additional investments in multiples of Re 1. The fund has an exit load of 0.5 per cent for exits within three months; after three months, no exit load will apply.
The fund will allocate 80-100 per cent of its assets in equity and equity-related instruments selected on the basis of business cycle. Additionally, it may invest up to 20 per cent in other equity and equity related instruments, debt and money market instruments or units issued by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
A business cycle is basically defined in terms of periods of expansion and contraction. Each business cycle comprising of upcycle and downcycle typically has four phases (1) expansion - rising growth (2) peak - growth stabilises at a high level (3) contraction - declining /slowing growth, and (4) trough - phase of weak/no growth.
The scheme aims to identify economic trends and investing in the sectors and stocks that are likely to outperform at any given stage of business cycle in the economy.
According to the scheme information document (SID), the fund is suitable for investors seeking long-term capital appreciation through investments in equity and equity-related securities with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles.
The scheme will follow an active investment strategy with an aim to be well diversified across industries, sectors and market capitalisation.
According to the SID, the fund manager will consider various economic parameters, such as corporate profit growth trend, GDP growth, current account deficit, fiscal deficit, interest rates, inflation as well as investment indicators like investment in capex, capacity utilisation, credit growth, business and consumer sentiment to decide the phase of business cycle.
The relative performance of equity market sectors typically tends to rotate as the overall economy shifts from one stage of the business cycle to the next, with different sectors assuming performance leadership in different economic phases.
According to the SID, the fund has been categorised in the very high risk category. As such, investors should carefully evaluate their risk tolerance before making an investment.