LIC MF Manufacturing Fund NFO: Date, Review & NAV

LIC MF Manufacturing Fund: Complete Overview

Under its Asset Management Company, LIC Mutual Fund Asset Management Limited, LIC Mutual Fund has come out with LIC MF Manufacturing Fund. The scheme is open-ended and sector-wise oriented, leaning towards the manufacturing sector.  

The primary goal of LIC MF Manufacturing Fund is investing in equities, and equity-related securities in the manufacturing sector with a long term capital gain objective.  

The amount of subscription for LIC MF Manufacturing Fund NFO is Rs.5000 and in multiples of Rs.1 thereafter. The new fund offer opens on 20th September 2024 and this LIC MF NFO will come to an end on 4th October 2024. This mutual fund scheme shall be available for further Sale and Repurchase from 16 October 2024. Regarding the level of risk presented with this plan, it is rated at very high risk. It cannot also be guaranteed that the purpose of making the investments contemplated in the program will be realized.

It is proposed that 80-100% would be allocated to equity and equity related instruments of manufacturing sector companies, 0-20% to equity and equity-related instruments of non-manufacturing sector companies, 0-20% to fixed income and money market instruments, and 0-10% to units of REIT and InvIT. Nifty India Manufacturing Index (Total Return Index) is the benchmark.

If you want to learn about the latest trends, insights, and news of NFO Mutual Fund you can keep reading to understand the offerings of this new NFO below:

Growth of Manufacturing in India

1. Adequate and Cost-Effective Labor Force

2. Access to Low-Cost Energy

3. Helpful Government Policies

4. Modifying Supply Chains to Lessen Dependency on China

5. Vast Consumer Base for Domestic Production

 

Government Initiatives on Domestic Manufacturing

• Made in India stimulates regional production and draws capital.

• Through the use of the economy, infrastructure, system, demography, and demand, Atma Nirbhar Bharat seeks to achieve self-reliance.

• India's National Logistics Policy seeks to lower logistics expenses while enhancing infrastructure and efficiency.

• Substitution of imports

 

Manufacturing Opportunity of India

Domestic Demand-

The use of Indian Manufacturing Capacity surpassed that of pre-COVID levels. After a decade of weakness, the Indian capex cycle is improving.

Import Replacement

India Exports $320 billion and Imports $423 billion in goods.

Realignment of Global Supply Chains (China+1)

China exports $3.3 trillion in CY23 compared to India's $306 billion (China 11x vs India)

The market share of India in World Manufacturing Output is 2.9%. India's manufacturing market share is anticipated to increase with sustained policy support and rising foreign direct investments (FDI).

India’s export of electronics goods rose by 3x from FY 19 to FY 24.

India’s defence exports rose by 2.5x from FY 21 to FY 24.

 

Sectors That May Grow In India

• Automotive

• Industrial Machinery

• Power Equipment

• Pharmaceutical

• Chemical

• Textile

• Defense

• Aerospace

• Power Cables

• Electronics Manufacturing

• Services (EMS)

• Consumer Durables

• Data Centre

• Semiconductor

• Space Satellite

 

LIC MF Manufacturing Fund: Investment Strategy

This Strategy intends to profile and select corporate entities undertaking operations in production and production-related activities by utilization of both top-down and bottom-up approaches.

In addition, the said investments will be assessed on an ongoing basis by the Scheme and the Fund Manager shall, if deemed beneficial to the participants, restructure the portfolio up to the extent that he wishes.

 

The following Companies Shall Be Included: 

• All types of companies related to manufacturing industry

• Businesses competently placed in India for on site production to minimize imports or maximize exports.

• Those industries which will gain the utmost advantages from the government’s programs implemented under Made in India and PLI

• Companies that are fabricated within the borders of India but marketed elsewhere

• Companies that will aid in fostering the growth of advanced technologies.

 

The Following Companies Would Be Included: 

• Companies engaged in manufacturing activities

• Companies that are strategically placed to manufacture locally and substitute imports in India

• Companies that are most likely to benefit from the Government Initiatives in Production Linked Incentive (PLI) and Make in India

• Companies, which have made in India products and sell them overseas

• Companies that enable the production of advanced technology.

 

Fund Suitability

The LIC MF Manufacturing Fund is ideal for the investors who are seeking to: 

• Invest basically in the capital and equity related instruments of a company after which the focus will be on the manufacturing sector

• Long-term capital appreciation.
  
  

Scheme Plan: 

This Scheme offers two plans Growth and Regular plans.

• LIC MF Manufacturing Fund Growth

• LIC MF Manufacturing Fund Regular.

 

LIC Mutual Fund Details

• Currently, Rs.32,423.29 crores worth of funds are under operation. Currently, LIC Mutual Fund offers roughly 26 distinct plans to suit the needs of investors with varying risk tolerances. Its holdings in the Indian stock market amount to 90.06%, 87.62% of these are large-cap equities, and the remaining 2.43% are mid-cap firms.

• With a CAGR of 14.56% over the previous three fiscal years, LIC AMC is one of investors' most favored large- and mid-cap mutual funds.

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LIC MF Manufacturing Fund: Facts

How to Invest in The Scheme After the Closure of The NFO?

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then on October 16, 2024, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “LIC MF Manufacturing Fund” or directly with the AMC or simply click the ‘Banner’ below.

 

Asset Allocation (% of Total Assets) of the Scheme's portfolio will be as follows:

 

Peers of LIC MF Manufacturing Fund

Since this scheme is new, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

• An open-ended equity scheme is what it is. The market's influencing elements, such as changes in interest rates, exchange rates, price and volume fluctuations in the debt markets, taxes, and government regulations, will inevitably cause the value of the investments to fluctuate.

• A substantial proportion of its corpus will be invested in equities and equity-orientated instruments directly or indirectly associated with the equities of companies with a manufacturing background. The allocation toward manufacturing companies will be sizeable because the Scheme is making an effort to hold an equity and equity-related investment in these companies.

• The time it takes the Fund to acquire units may influence the values of securities; this might be the case, especially if the Fund receives a high volume or value of redemption requests.

• Risk due to income uncertainty resulting from a company's line of work.
  
  

Past Performance of Manufacturing Funds

 

LIC MF Manufacturing Fund-Growth Fund Managers:

• Yogesh Patil

• Mahesh Bendre.
  
  

Conclusion

The risk profile of this scheme is extremely high. Due to several government efforts and the current rise in the industry, it has room to grow.  Returns, however, cannot be assured. You should consider your investing horizon and risk tolerance.

Disclaimer: This NFO analysis is provided solely for informative purposes and should not be considered investment advice. Always conduct research and talk with a financial advisor before investing.