LIC Mutual Fund Launches New Manufacturing Fund: What Investors Need to Know

LIC Mutual Fund, one of the oldest and most reputable fund houses in India, has recently launched the LIC ME Manufacturing Fund. This open-ended equity scheme aims to capitalize on the burgeoning opportunities within the manufacturing sector. The New Fund Offer (NFO) is currently open for subscription until October 4, 2024, with unit allotment scheduled for October 11, 2024.

The primary objective of the LIC MF Manufacturing Fund is to achieve long-term capital appreciation by investing in equity and equity-related securities specifically within the manufacturing sector. This focus includes a wide array of industries such as automobiles, pharmaceuticals, chemicals, heavy engineering, metals, shipbuilding, and petroleum products, among others.

India's manufacturing landscape is experiencing significant growth, driven by several key factors including urbanization, a rapidly expanding economy, and supportive government initiatives. Programs such as the Production Linked Incentive (PLI) Scheme and the 'Make in India' initiative are positioning India as a global manufacturing powerhouse. In this context, the LIC MF Manufacturing Fund seeks to tap into these promising growth opportunities.

The fund will be managed by experienced professionals Yogesh Patil and Mahesh Bendre. RK Jha, Managing Director & CEO of LIC Mutual Fund, stated, "India's GDP growth, rising middle-class population, and export incentives are boosting demand for manufactured goods. Manufacturing will play a critical role in making India a $5 trillion economy by 2027. This fund aims to benefit from the positive outlook for the manufacturing sector."

Yogesh Patil, Chief Investment Officer (Equity) at LIC Mutual Fund, highlighted that India’s manufacturing sector is poised for significant growth due to government reforms and shifts in global supply chains. He noted, "With initiatives like 'Make in India' and 'Atmanirbhar Bharat,' we expect India's manufacturing sector to become a key engine of economic growth."

In terms of fund allocation strategy, the LIC ME Manufacturing Fund will focus on a diverse portfolio: allocating 80%-100% in equity and equity-related instruments of manufacturing companies, 0%-20% in equity and equity-related instruments of other companies, 0%-10% in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), and 0%-20% in debt securities and money market instruments.

For potential investors, the fund is benchmarked against the Nifty India Manufacturing Index (Total Return Index), making it a relevant choice for those seeking long-term capital appreciation in the manufacturing sector. However, as with any investment, it is crucial for individuals to assess their own risk tolerance and investment goals before subscribing to the NFO.

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Overall, the launch of the LIC ME Manufacturing Fund represents a timely opportunity for investors looking to align their portfolios with India’s growing manufacturing sector. The focus on long-term capital appreciation and the positive economic backdrop make this fund a noteworthy addition to the investment landscape.

[Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making any investment decisions.]