Opportunity Fund

What are Opportunity Funds?

Opportunity Fund is an investment fund that invests in high growth opportunity assets or undervalued opportunities in the industry sectors. Opportunity Funds are initiated to leverage market uncertainty, emerging trends, or infrequent investment opportunities.

Characteristics of an Opportunity Fund

• Depending on the market, invests in stocks, bonds, real estate, start-ups, or distressed assets using a flexible investing strategy.
• Invest in high return assets but the assets could be dangerous. High-risk, high-reward.
• Usually controlled by professionals with aggressive investment and trend analysis background, active management.
• Diversification aims to distribute the risk among sectors and asset categories.

Different Types of Opportunity Funds

• Equity-Based Opportunity Funds make investments in highly growth potential stocks.
• Invested in undervalued or newly developed real estate assets are Real Estate Opportunity Funds.
• Funds investing in government-approved Opportunity Zones for tax advantage are among tax-advantaged opportunity funds.

Who Should Invest?

1. Investors with long investment horizon and great risk appetite.
2. Those who require diversification between bonds and stocks.
3. Investors looking for market-driven possibilities instead of set asset allocation

An India Opportunity Fund Example

• Certain mutual funds and portfolio management tools (PMS) offer opportunity-based funds invested in sectors most likely to develop faster.
• Global funds also expose one to disruptive or developing industry.