HDFC Mutual Fund today sought SEBI approval to launch HDFC Housing Opportunities Fund – Series 1, a close-ended equity oriented hybrid fund.

As the name suggests the fund will invest in housing theme to take advantage of the expected growth in housing and allied business, said the fund house in a draft offer document.

Sharing the rationale behind launching this fund, a senior official of the fund house said, "In the budget 2017, the government has given a thrust to affordable housing sector. In fact, we have seen growing demand of housing sector among investors. Hence, we plan to launch a fund focussing on housing sector."

The fund house plans to introduce three plans in the scheme depending on the tenure ranging between 24 and 66 months.  

The scheme will invest a minimum of 70% in equity instruments of entities in housing and its allied business activities, which include the cement and steel industries. The fund can also take exposure of up to 10% of corpus in REITS and InvITs. It will also invest up to 30% in debt and money market instruments.

HDFC Housing Opportunities Fund is the first housing-oriented fund to seek SEBI approval. Experts say the fund is suitable for investors having high-risk appetite.

Srinivas Rao Ravuri will manage this fund.