The Invesco India Business Cycle Fund is a new open-ended equity scheme that follows a business cycle investing theme. This means it dynamically allocates capital between sectors and companies depending on the prevailing economic cycle. The fund aims to capture opportunities at different stages of the business cycle, offering investors exposure to companies that are well-positioned for growth.

Investment Objective

The primary objective of the fund is to achieve long-term capital appreciation by investing in equity and equity-related instruments. The strategy involves dynamically adjusting sectoral and stock allocations based on business cycle trends, enabling the fund to identify opportunities across various phases of economic growth. However, there is no guarantee that the investment objective will be achieved.

Benchmark Index

The fund follows the Nifty 500 Total Return Index (TRI) as its benchmark, ensuring a broad-based representation of the Indian equity market.

Fund Managers

The fund will be managed by Mr. Aditya Khemani and Mr. Amit Ganatra, who bring extensive experience in equity market investments.

NFO Period

The New Fund Offer (NFO) is open from February 6 to February 20, 2025.

Investment Framework and Approach

Key Considerations for Investment

The fund takes a comprehensive view of business cycles and company lifecycles to identify promising investment opportunities. Key economic indicators such as GDP growth, inflation, and credit cycles play a crucial role in the selection process.

Stock Selection Strategy

• Pro-cyclical Investments (~70%): Companies demonstrating revenue growth exceeding nominal GDP growth, typically in the growth phase of their lifecycle.
• Counter-cyclical Investments (~30%): Companies with revenue growth below nominal GDP but with potential for recovery.

Sector and Market Capitalisation Approach

• A mix of top-down and bottom-up approaches to identify growth-oriented sectors and companies.
• Exposure across large-cap, mid-cap, and small-cap stocks to diversify risk.
• Sector weightings may significantly differ from the benchmark, depending on economic trends.

Key Themes Influencing Business Cycle Investing

The fund aims to benefit from structural changes in the economy by investing in sectors and companies aligned with major macroeconomic trends, such as:

• Premiumisation: Companies focusing on high-end consumer goods and services.
• Clean Energy Transition: Shift from internal combustion engines (ICE) to electric vehicles (EVs) and renewable energy.
• Make in India: Manufacturing-led growth in electronics and defence sectors.
• Digitisation and Financialisation: Growth in fintech, digital services, and expanding financial markets.
• Healthcare Innovation: Investment in pharmaceutical contract development (CDMO), health, and wellness.
• Travel and Leisure: Revival of tourism and hospitality industries.

Exit Load Structure

• 0.50% exit load if units are redeemed/switched within 3 months from allotment.
• No exit load if redeemed after 3 months.

Investment Plans and SIP Options

The fund offers:

• Regular and Direct Plans with Growth and IDCW (Income Distribution cum Capital Withdrawal) options.
• Minimum lump sum investment: ₹1,000 (in multiples of ₹1 thereafter).
• Systematic Investment Plan (SIP):
  • Monthly SIP: Minimum ₹500 (12 instalments).
  • Quarterly SIP: Minimum ₹1,000 (6 instalments).
  • Half-yearly SIP: Minimum ₹1,500 (4 instalments).

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.