HDFC Asset Management Company has launched the New Fund Offer of HDFC Banking and Financial Services Fund, which aims to invest in the banking and financial services sector across segments and market capitalisation.
The NFO, which opened on Friday, will close on June 25.
The fund will invest in companies that are leaders and are gaining market shares due to superior execution, scale and better adoption of technology.
The fund will also focus on opportunities in new listings, including pre-IPO participation in lending, insurance, capital market businesses and fintechs.
With GDP growth bottoming out and a revival boosting economic growth, HDFC Mutual Fund believes that this is the opportune time for banking and financial services fund.
The measures taken by Government and RBI to support the economic revival will benefit the sector.
Indian Banking is in the best shape after many years, and the capex cycle is likely to revive, supporting credit growth.
The massive increase in the digital delivery of services compared to the pre-Covid period likely to drive cost lower, which is a positive for the financial services space.
Anand Laddha, Fund Manager, HDFC AMC, said despite the financial services sector growing faster than the GDP in the last two decades, the penetration services provided is low.
The banking and financial services sector has demonstrated the ability to generate a return over the market return when the economy is in the growth phase, he added.