Axis Mutual Fund has unveiled the Axis India Manufacturing Fund, an open-ended scheme that mirrors the landscape of manufacturing in India. This fund offers potential investors the opportunity to invest in a variety of sectors benefiting from the economic shifts taking place in India. With the new fund being benchmarked against the Nifty India Manufacturing TRI, the NFO is set to open on December 1st, 2023, and will remain open until December 15th, 2023.
Explaining the choice of manufacturing as the fund’s main theme, the company highlighted India’s advancement in modern technologies and its aim for sustainable growth. Government initiatives, alongside labor and tax alterations, have placed India as a globally competitive manufacturing center. Due to India’s reliance on consumption, it is considered to be less susceptible to global economic changes. As a result, the potential for growth in the manufacturing industry is high.
The Axis India Manufacturing Fund is strategically designed to invest in sectors that are expected to benefit from India’s economic shifts. It will encompass a broad spectrum of sectors such as capital goods, consumer durables, textiles, and pharmaceuticals, providing an extensive investment avenue within India’s manufacturing landscape.
The fund will target companies involved in capex cycles, consumer-driven industries, and those benefitting from India’s global supply chain integration. Furthermore, the fund will adopt a bottom-up approach, selecting stocks across different market caps. It will focus on active sector allocation and a ‘Quality’ investing style, aiming to explore underrepresented segments in the Indian listed markets.
Discussing the potential risks associated with manufacturing funds, investment advisor Abhishek Kumar cautioned investors against allocating more than 10% of their portfolio to these thematic funds. Due to their focused investment in specific sectors or trends, thematic funds like manufacturing funds are considered to carry higher risks. Their success is dependent on the performance of those particular themes and is more vulnerable to market fluctuations and industry-specific challenges.
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