Biz cycle funds can generate alpha but carry risks: What should you do?

Higher concentration and fund manager risk make these funds apt only for seasoned investors


Illustration: Binay Sinha

Sarbajeet K Sen

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Mahindra Manulife Asset Management Company’s (AMC) new fund offer (NFO) of its business cycle fund began on August 21 and will close on September 4, 2023. Nine such funds manage assets worth Rs 18,358 crore (data as on July 31, 2023). While fund houses present business cycle funds as an avenue to invest in promising businesses with the potential to fetch high returns, investors need to evaluate these funds thoroughly before betting on them.

Nature of a business cycle fund 

Economies and financial markets witness cycles. Capturing the growth phase of these cycles can lead to substantial wealth creation. Fund managers of these funds aim to invest in stocks that are expected to experience a marked improvement in cash flows.

First Published: Sep 01 2023 | 12:01 PM IST

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