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India is known all over the world as the hub of service industry. The country’s manufacturing industry has been developing in recent months. This is the reason why the country’s commodity exports have improved in September. The manufacturing industry contributes 28 percent to the gross value added of the country. Market experts say that there are many sectors related to manufacturing which can develop rapidly in the coming years. These include sectors like automobile, defence, mining, capital goods, railways, textiles, chemicals, petroleum and gas.
To take advantage of the boom in these sectors, investors can invest through theme based mutual funds. Among funds based on manufacturing theme, ICICI Prudential has given excellent returns in the last few years. As per the data, ICICI Prudential Manufacturing Fund has given returns of 35.3%, 34.7% and 19.7% on one, three and five year basis respectively. This is much better than the S&P BSE India Manufacturing TRI’s return of 2.6 to 9.6 per cent. These returns are the best among equity funds across all categories. ICICI Prudential Manufacturing Fund has given a strong 25.3% in SIP returns (XIRR) over the last five years.
Better performance in rolling returns also
Consistency in returns also works in favor of this fund. This is also confirmed by taking three-year rolling returns over the last five years. On a three-year basis from October 2018 to October 2023, ICICI Prudential Manufacturing Fund has given an average return of 24.6%. Furthermore, it has returned more than 18% approximately 93.1% of the time on a three-year rolling basis, indicating the stability of this fund.
Manufacturing industry will benefit from PLI
Market experts say that due to rapid urbanization in the country and increasing income of people, the demand for housing and infrastructure will increase in the coming days. The government has launched schemes like Production Linked Incentive (PLI) Scheme, Make in India, Gati Shakti for multimodal logistics to promote manufacturing in the country. Apart from this, expressways and highways are being constructed across the country. Besides, the government is also focused on increasing defense exports. All this will benefit the country’s manufacturing industry and in the coming years, companies associated with this industry can give better returns to their investors.
Investments are made in all types of companies
The fund is investing across a cross-section of manufacturing sectors with investments. ICICI Prudential Manufacturing Fund follows a blended investment approach that combines both value and growth styles. The fund adopts a multi-cap approach to building its portfolio by investing across all market capitalizations i.e. large, mid and small caps. A combined approach of top-down and bottom-up stock selection methods is chosen for best results. Currently the fund is focusing more on Auto Ancillary, Capital Goods and Cement compared to the benchmark index.