Closed-end mutual fund schemes serve two purposes: One, it does not allow the investor to time the market, or exit if things get too volatile.
Two, since the corpus is locked in for three years or more, the fund manager gets enough time to give returns to the investor because he can take medium-term calls without worrying too much about the investor’s risk appetite. What is interesting about HDFC Mutual Fund’s latest closed-end scheme is its focus on only the housing sector.