ICICI Manufacturing Fund: Great Time to Make Your Returns Higher

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Introduction

The ICICI Prudential Manufacturing Fund, a thematic equity fund, has demonstrated exceptional performance recently, focusing on the manufacturing sector to deliver impressive returns.

This scheme was established on 7th October 2018 and since then it has generated 24.62% returns. With a robust AUM (Asset Under Management) of Rs.4841.52 Crores as of 31.05.24. Investors looking for a growth-focused scheme will find this scheme a perfect match. It is suggested to have a long-term horizon of approx. 5-7 years when investing in this scheme.

Here, we explore the key features and performance metrics of the ICICI Prudential Manufacturing Fund to aid in making informed investment decisions.

ICICI Prudential Manufacturing Mutual Fund: Overview

The ICICI Prudential Manufacturing Fund is a thematic equity fund, which means it specifically invests in companies that are part of the manufacturing sector. The fund’s objective is to deliver strong long-term returns by focusing on the growth opportunities within the manufacturing industry.

Recently, this fund has demonstrated exceptional performance, indicating that it has been able to generate impressive returns for its investors. This suggests that the fund’s investment strategy and stock selection have been successful in capturing the growth of the manufacturing sector.

Some key features of the ICICI Prudential Manufacturing Fund:

It is a thematic fund that concentrates its investments in the manufacturing sector.

The strong recent performance of the fund implies it has been able to deliver robust returns for its investors.

By focusing on the manufacturing theme, the fund aims to provide investors with exposure to the growth potential of this important sector of the Indian economy.

Overall, the ICICI Prudential Manufacturing Fund appears to be a compelling option for investors interested in participating in the growth of the manufacturing industry through their investments. The fund’s recent performance track record indicates it has been successful in delivering attractive returns, making it worth considering as part of a diversified investment portfolio.

Key Aspects of ICICI Prudential Manufacturing Mutual Fund

Here are the main aspects of this scheme:

Investment Objective: The primary goal of the ICICI Prudential Manufacturing Fund is to achieve long-term capital appreciation by diversifying its portfolio across various sectors within manufacturing.

Benchmark: The fund tracks the Nifty India Manufacturing Total Return Index as its performance benchmark.

Expense Ratio: The direct plan boasts a lower expense ratio of 0.69% compared to the category average of 1.89%, while the regular plan has an expense ratio of 1.89%.

Minimum Investment: Both the direct and regular plans require a minimum investment of ₹5000. With subsequent investments starting at ₹1000 for both plans.

Exit Load: There is a 1% exit load if units are redeemed within one year.

Risk Grade: The fund carries a Very High-risk grade, suitable for investors with a high-risk tolerance.

Performance of ICICI Prudential Manufacturing Fund

Now, let us delve into learning the performance of this scheme at various intervals:

Return since Launch: Since its inception on October 11, 2018, the fund has delivered a return of 22.5%.

1-Year Return: The direct plan has achieved a 1-year return of 69.42%, while the regular plan has seen 64.76%.

3-Year Return: Over three years, the direct plan has recorded a return of 31.82%, and the regular plan has shown 32.12%.

5-Year Return: For five years, the direct plan has delivered a return of 28.31%, and the regular plan has achieved 29.92%.

SIP Returns: SIP returns over the last 5 years are 22.44% for the direct plan and 22.71% for the regular plan.

Portfolio Allocation of ICICI Prudential Manufacturing Fund

The following points show the distribution of this scheme’s assets:

Asset Allocation

  • The fund primarily invests in equity and equity-related securities, which means it puts the majority of its money into stocks of manufacturing companies.
  • This focus on the manufacturing sector is the core investment strategy of the fund.

Sector Allocation

  • The fund does not publicly disclose the specific breakdown of its investments across different manufacturing sectors or sub-sectors.
  • This means investors don’t have detailed information on how the fund’s portfolio is allocated across various manufacturing industries.

Market Cap Allocation

  • Similarly, the fund does not provide publicly available data on how its equity investments are distributed across large-cap, mid-cap, and small-cap companies.

In summary, while we know the HDFC Manufacturing Fund is focused on the manufacturing sector.

What is the Taxation of ICICI Prudential Manufacturing Fund?

Let us study how the taxes levied on this scheme:

Short-Term Capital Gains (STCG)

When units of the ICICI Prudential Manufacturing Fund are sold within one year of purchase, any resulting gains are considered short-term. These gains are taxed at a rate of 15%. This means that if you sell your fund units within one year of acquiring them and earn a profit, you will owe 15% of that profit in taxes.

Long-Term Capital Gains (LTCG)

Units held for more than one year before being sold incur long-term capital gains tax. For gains exceeding ₹1 lakh, a 10% tax rate applies. For example, if your fund units are held for more than a year and your total gains exceed ₹1 lakh, you will be taxed at 10% on the portion of gains above ₹1 lakh.

Understanding these taxation rules is crucial for investors to effectively plan their investment strategies and comprehend the financial implications of their investment decisions in the ICICI Prudential Manufacturing Fund.

Conclusion

The ICICI Prudential Manufacturing Fund presents a compelling opportunity for investors looking to capitalize on India’s thriving manufacturing sector. Since its inception in October 2018, the fund has consistently delivered impressive returns, currently standing at 24.62% with an AUM of Rs. 4841.52 Crores as of May 31, 2024, demonstrating strong market confidence.

Moreover, the fund offers attractive SIP returns, ensuring consistent performance over time and making it an ideal choice for systematic investment planning.

With a strategy focused on long-term capital appreciation via investments in leading manufacturing businesses. It boasts a competitive expense ratio below the category average. For investors considering this fund, maintaining a disciplined investment horizon of approximately 5-7 years can unlock substantial growth potential. Despite its higher-risk nature and sector-specific volatility, the fund’s well-structured approach positions it as a promising option for growth-oriented portfolios. To capitalize on these opportunities wisely, it’s advisable to consult with financial advisors to align your investment strategy with your financial goals effectively.

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Written by pawansharma