HDFC MF launches Manufacturing Fund; NFO opens on April 26: Check investment strategy, objective, riskometer & other details

HDFC Manufacturing Fund: Last week, Union Finance Minister Nirmala Sitharaman said the Centre has tailored policies to make India an attractive destination for manufacturing and services, and the aim was to produce not just for the domestic market but for exports as well.

Besides, an article published by Morgan Lewis in January this year said the Indian manufacturing sector is projected to be one of the fastest-growing sectors in the local economy. "With programmes like Make in India, the Indian government is seeking to drive forward the country’s manufacturing presence by providing local manufacturers with government incentives."

Given this scenario, HDFC Asset Management Co. Ltd., the investment manager to HDFC Mutual Fund (HDFC MF), has announced the launch of the HDFC Manufacturing Fund. This is an open-ended equity scheme that aims to unlock the potential of India's manufacturing sector by investing predominantly in equity and equity-related securities of companies engaged in manufacturing activities.

The NFO for HDFC Manufacturing Fund will open on April 26, 2024, and conclude on May 10, 2024.

"India's manufacturing sector stands on the cusp of an Amrit Kaal, a golden era, fuelled by various factors such as growing consumption, investments, and exports, coupled with changing geopolitical dynamics and the government's push for self-reliance through reforms and incentives. The fund seeks to capitalise on these tailwinds, offering investors an opportunity to participate in the country's transformation into a global manufacturing powerhouse," the press release said. 

Fund Objective

The fund’s investment objective is to provide long-term capital appreciation by identifying companies poised to benefit from India’s manufacturing resurgence.

Fund's investment strategy

The fund emphasises a core portfolio comprising at least 80 per cent investment in stocks representing diverse sectors under the manufacturing theme. The flexible approach allows for investments across market capitalisation, offering investors exposure to a wide range of opportunities within the manufacturing landscape, the press release added. 

Scheme manager

The scheme will be managed by Rakesh Sethia, who has over 19 years of experience in equity research. "Our investment style revolves around rigorous bottom-up research aimed at identifying companies with a compelling long-term growth story," the fund manager said.

Riskometer

The scheme, being thematic, carries higher risks than diversified mutual funds on account of concentration and sector-specific risks.