ICICI Prudential Manufacturing Fund: Is It a Valuable Choice?

Insights into ICICI Pru Manufacturing Fund

In the financial landscape, mutual funds give you many options to make good money in the long term. Though it offers a wide range to pick from, manufacturing is on the trend. Why?

You see, the government announced its support to the manufacturing and energy sectors. Supposedly, favouring the companies that deal in producing and selling consumer goods. But the question remains, which scheme to choose? How can you be sure it is a good investment?

If these are some questions that come to your mind too, then let’s give all the solutions in just one post.

In this article, you will uncover an impressive scheme, ICICI Manufacturing Fund. It is amongst the oldest funds in its category with a current AUM (Asset Under Management) of Rs.6741 Crores and giving 24.22% returns since inception.

Let’s look at the detailed analysis of this fund to decide whether it is a valuable investment for your portfolio.

Basic Details of ICICI Prudential Manufacturing Fund

To begin, ICICI Pru MF was introduced in the market on 07th October 2018. Based on a theme, it keeps its major investment in companies that are engaged in manufacturing a variety of products such as FMCG (fast-moving service goods), mobiles, electronics, etc.

Why it is Profitable to Invest in ICICI Prudential Manufacturing Fund?

Here are some interesting concepts that make this scheme an attractive option:

1. Capitalizing on Manufacturing Growth: Since the Indian government has planned several schemes such as the “Make in India”, this makes it easy for investors who target this fund as they will be in a position to invest in sectors that are most likely to benefit from higher domestic or global demand.
2. Strong Historical Performance:While comparing it with its benchmark and competitors, the ICICI Prudential Manufacturing Fund has delivered better results making it an ideal destination for investors in search of extraordinary returns. This shows that the fund has been substantial in preceding years and its capacity to adapt to forceful market conditions as well as capture advancement prospects.
3. Diversification Benefits: The fund also achieves diversification of risk across various companies within the manufacturing sector while being aligned to a given theme. In this manner, this diversification can also increase the different levels of stability of your investment portfolio.
4. Professional Management:Seasoned employees who possess a good understanding of the market, and the fundamentals of manufacturing companies also run the fund. They can provide direction in tackling problems and maximizing opportunities where they exist.
5. Long-Term Growth Potential:The ICICI Prudential Manufacturing Fund is specifically for the long-term investor who expects to receive steady appreciation in the manufacturing funds in the future.
6. Flexibility with SIPs: SIPs are more advantageous, particularly to those people who want to invest big but lack a large amount of money to invest as the scheme allows one to invest with as low as Rs. Therefore the idea of reinvestment of the dividends are made easier by the use of SIPs without needing a big amount of money to get started.

Review of the Important Functions of the ICICI Prudential Manufacturing Fund

Here are some key features to understand about this fund:

1. Investment Objective:The key objective of the ICICI Prudential Manufacturing Fund is to generate long-term capital appreciation from at least 80% of its total net assets that will be invested in manufacturing companies’ equities. This includes the auto industry, capital equipment, metals and mining and healthcare.
2. Expense Ratio:The ICICI Prudential Manufacturing Fund stands out in its relatively low expense ratio of 0.67% which is lower than the category average. This implies more of the investment revenues to be reinvested thus increasing the total returns and hence greater profitability.
3. Fund Size:The fund has come into existence from September 2024 and as of now has the Assets Under Management (AUM) of around ₹6,751.68 crore which proves that investors are confident and interested in the fund.
4. Minimum Investment:It is relatively inexpensive to invest with Axis Mutual Fund as the minimum amount that the investors can invest in SIP is ₹ 100.
5. Exit Load:It has an option of an exit load of 1% on redemption of units for the first year which discourages short-term trading.

Who Should Invest in ICICI Prudential Manufacturing Fund?

The ICICI Prudential Manufacturing Fund is valid for a certain type of investor as per the requirement of its investing strategy and risk appetite. Here are the key groups of investors who should consider investing in this fund:

1. Long-Term Investors: Long-term investment planning is most appropriate with this kind of fund investment planning for five years or more. Many manufacturing companies can also take some time before they gain their expansion, the long-term investments can be used in preparing for market shocks.
2. Risk-Tolerant Investors:All things considered, the fund entails very high risk, seeing that it invests in equities in the manufacturing industry. Investors have to be okay with the company’s drastic price swings and prepared for worse-case losses for the unlikely better-case gains.
3. Investors Seeking Sector Exposure:The fund will benefit anybody looking for exposure, particularly towards manufacturing in India. They finance firms in sub-sectors of manufacturing, such as automobiles, capital goods, and chemicals, which qualifies it as a choice investment.
4. Growth-Oriented Investors: Investors who expect growth in Indian manufacturing owing to government-sponsored programs like “Make in India” will find this fund suitable as it is apparent that the investors intend to ride the growing trend.
5. Value Investors: It is right for investors who would wish to invest in opportunities in green field manufacturing companies and undervalued stocks that have sound fundamental and promising growth profiles.

Final Words

In the end, if financial safety is what you seek then it is a perfect fit for you. It will give exposure to your portfolio apart from the regular equity investments. Just make sure you have a strategic plan to reduce the market volatility or you can just go with SIP. But one last thing, keep your investment tenure for at least 5 years or more. This simple technique will give the fund its necessary time to make good returns for you.