Axis Mutual Fund has announced the launch of the Axis India Manufacturing Fund, an open scheme designed to reflect India’s manufacturing landscape. The new fund offer (NFO) is set to open on December 1st, 2023 and will be available for investors to participate in until December 15, 2023.
The fund is strategically designed to invest in sectors that are expected to benefit from India’s economic shifts, with a focus on bottom-up strategy and stock selection across market caps. It will be benchmarked against the Nifty India Manufacturing TRI.
According to the fund manager, India’s increasing technological advancements and focus on sustainable growth positions the country as a competitive global manufacturing center. The growth in India’s manufacturing sector is driven by enhanced economic confidence and increased product demand. This makes manufacturing a promising theme for investors.
The fund will provide investment opportunities in sectors such as capital goods, consumer durables, textiles, and pharmaceuticals, reflecting the depth of India’s manufacturing strength.
The strategy of the Axis India Manufacturing Fund will target companies across three sectors of the Indian economy: those focusing on capex cycle investments, industries experiencing increased demand, and companies benefiting from India’s global supply chain integration.
The fund will adopt a bottom-up strategy and aim to select stocks across market caps. Additionally, it will emphasize active sector allocation and a ‘Quality’ investing style. The managing director and CEO of Axis Asset Management Company (AMC), B Gop Kumar, states that the thematic fund is designed to capitalize on India’s growing momentum by focusing on sectors that are set to reshape India’s industrial landscape.
The performance of similar manufacturing funds in India over the past one and three years is as follows:
– Aditya Birla Sun Life Manufacturing Equity Fund – Direct Plan: 1-year return – 18.33%, 3-year return – 16.99%
– ICICI Prudential Manufacturing Fund – Direct Plan: 1-year return – 32.20%, 3-year return – 31.86%
– Kotak Manufacture in India Fund – Direct Plan: 1-year return – 21.62%, 3-year return – unlisted
Investors are advised to exercise caution when investing in thematic funds, as they carry higher risks due to their focused investment in specific sectors or trends. It is recommended that they limit their portfolio allocation to thematic funds to no more than 10% to avoid large drawdowns in the event of unfavorable outcomes.
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