ICICI Prudential Manufacturing Fund Overview
The ICICI Prudential Manufacturing Fund is a thematic equity fund that focuses on companies engaged in manufacturing activities across various sectors. As an investor, it’s crucial to understand the key aspects of this fund to make an informed decision.
In this article, we’ll cover everything you need to know about the ICICI Prudential Manufacturing Scheme.
Fundamentals of ICICI Prudential Manufacturing Fund
The following points show the basic aspects of this scheme:
Fund Objective and Investment Strategy
- The fund is an open-ended equity scheme that aims to generate long-term capital appreciation.
- It invests predominantly in equity and equity-related securities of companies in the manufacturing sector.
- The fund’s investment strategy is focused on identifying and investing in companies with strong manufacturing capabilities across various sub-sectors.
Sector Focus
- The fund excludes sectors like financial services and IT, which are typically not considered part of the manufacturing industry.
- Instead, it focuses on industries such as pharmaceuticals, engineering, consumer goods, automotive, and metals.
- This thematic focus allows the fund to capitalize on the growth and performance of the manufacturing sector in India.
Fund Managers
- The fund is managed by a team of experienced fund managers, including Anish Tawakley, Lalit Kumar, and Sharmila D’mello.
- The fund managers rely on their expertise and research to select high-potential manufacturing companies for the portfolio.
- The team-based approach aims to leverage the collective knowledge and experience of the managers.
Benchmark
- The ICICI Prudential Manufacturing Mutual Fund is benchmarked against the Nifty India Manufacturing Total Return Index.
- This index is designed to track the performance of companies in the manufacturing sector, providing a relevant benchmark for the fund’s performance evaluation.
Risk Profile and Investor Suitability
- The fund is classified as a high-risk investment due to its focus on the manufacturing sector, which can be subject to market volatility.
- It is suitable for investors with a long-term investment horizon of at least 3 years, who can withstand short-term market fluctuations.
- Investors should have a high-risk appetite and the ability to stay invested for the long term to potentially benefit from the fund’s capital appreciation objective.
Investment Horizon
- The fund is designed for long-term investors who can commit their capital for a minimum period of 3 years.
- The long-term investment approach aims to capitalize on the growth and performance of the manufacturing sector over an extended period.
Overall, the ICICI Prudential Manufacturing Mutual Fund offers investors a focused exposure to the manufacturing sector in India, with the potential for long-term capital appreciation, but it also carries a higher risk profile that may suit investors with a suitable risk appetite and investment horizon.
Investment Objective and Strategy of ICICI Prudential Manufacturing Fund
The primary objective of the ICICI Prudential Manufacturing MF is to create a portfolio that is invested predominantly in equity and equity-related securities of companies engaged in the manufacturing theme. The fund aims to generate long-term capital appreciation by investing at least 80% of its net assets in the manufacturing sector.
The fund employs a bottom-up approach to stock selection, focusing on companies with strong fundamentals, growth potential, and competitive advantages. The portfolio is diversified across market capitalizations, with investments in large-cap, mid-cap, and small-cap companies.
Performance and Returns
As of recent data, the ICICI Prudential Manufacturing Fund has delivered strong returns:
- 1-Year Return:5%
- 3-Year Return:4%
- 5-Year Return:8%
- Since Inception Return:6%
The fund has consistently outperformed its category average, indicating its ability to generate superior returns for investors.
However, it’s important to note that past performance is not a guarantee of future results, and investors should consider the fund’s risk profile and investment objectives before making a decision.
ICICI Prudential Manufacturing Fund: Fees and Expenses
The ICICI Prudential Manufacturing Scheme charges an exit load of 1% if redeemed within one year from the date of allotment. The expense ratio of the fund is 0.005% (from July 1st, 2020).
Returns from the ICICI Prudential Manufacturing Fund are taxed as follows:
- Short-Term Capital Gains (STCG): If units are redeemed within one year of investment, gains are taxed at 15%.
- Long-Term Capital Gains (LTCG): If units are redeemed after one year of investment, gains above ₹1 lakh in a financial year are taxed at 10%.
What is the Minimum Investment and SIP in ICICI Prudential Manufacturing Fund?
Here are the key points regarding the minimum investment requirements for the ICICI Prudential Manufacturing Mutual Fund:
Minimum Initial Investment
- The minimum investment required for the first investment in the ICICI Prudential Manufacturing Stock is ₹5,000.
Minimum Subsequent Investments
- For subsequent investments in the fund, the minimum investment amount is ₹1,000.
Minimum SIP Investment
- The minimum investment required for a Systematic Investment Plan (SIP) in the ICICI Prudential Manufacturing Fund is ₹100.
Importance of Minimum Investments
- The minimum investment requirements ensure a certain level of commitment from investors.
- They help maintain the fund’s operational efficiency and viability.
Flexibility for Subsequent Investments
- The lower minimum investment for subsequent contributions (₹1,000) provides flexibility for investors.
- It allows investors to make additional investments in smaller amounts after the initial lump-sum investment.
Systematic Investment through SIPs
- The low minimum SIP investment of ₹100 enables investors to start investing regularly in smaller amounts.
- This systematic approach can benefit from the power of compounding over the long term.
Overall, the ICICI Prudential Manufacturing Fund’s minimum investment requirements are designed to cater to both lump-sum and systematic investment strategies, providing investors with the flexibility and accessibility to participate in this thematic fund.
Conclusion
The ICICI Prudential Manufacturing Mutual Fund presents an opportunity for investors to participate in the growth of the Indian manufacturing sector. Being a smart investor, SIP is the best way to invest for long-term capital gains.
With a focus on companies engaged in manufacturing activities, the fund aims to generate long-term capital appreciation. However, investors should carefully consider their risk tolerance, investment horizon, and financial goals before investing in this fund. It’s always advisable to consult with a financial advisor to determine if the ICICI Prudential Manufacturing Scheme aligns with your investment strategy.