HDFC Manufacturing Fund (NFO): A Look for Growth

HDFC Manufacturing Fund (NFO): A Look for Growth

The HDFC Manufacturing Fund NFO (New Fund Offer) is a new investment option launched by HDFC Mutual Fund. It’s an open-ended equity scheme designed to capitalize on the potential growth of India’s manufacturing sector.

Who Should Consider This HDFC Manufacturing Fund NFO?

This NFO is likely targeted towards investors with the following profile:

• Bullish on Manufacturing: Investors who believe the Indian manufacturing sector is poised for significant growth due to factors like government initiatives, rising domestic consumption, and global supply chain shifts.
• Growing consumption, investments and exports.
• Changing geopolitical dynamics (China + 1)
• Emergence of India as a manufacturing powerhouse
• Government’s push: Government’s push for self-reliance (Atmanirbhar Bharat) by way of reforms and incentives Supportive macroeconomic environment with rising capex, low leverage and high levels of capacity utilisation Emergence of India as the largest pool of cost-effective labour supply Global realignment of supply chains High value-add manufacturing should accelerate, supported by dominance of a strong high end service economy.
• Long-Term Horizon: The fund aims for long-term capital appreciation, so investors should be comfortable with a multi-year investment timeframe.
• Objective: Targeting Long-Term Growth in Manufacturing
• HDFC Manufacturing Fund investment objective is to provide long-term capital appreciation by identifying companies that are expected to benefit from the growth of India’s manufacturing sector.
• The fund will primarily invest in equity and equity-related instruments of companies engaged in various manufacturing activities. This could include companies in sectors like automobiles, capital goods, chemicals, textiles, pharmaceuticals, and more.
• Note: The fund will not invest in assets like bonds or real estate.

Return Analysis – NIFTY INDIA MANUFACTURING INDEX

Sector Allocation of HDFC Manufacturing Fund NFO

Asset Allocation of HDFC Manufacturing Fund NFO

HDFC Manufacturing Fund NFO FACTS

• Fund Type: Thematic/Sectoral Equity
• Type of Scheme: An open ended equity scheme following manufacturing theme
• NFO Dates:
  • Opens on: April 26, 2024
  • Closes on: May 10, 2024
  • Scheme Reopens on: Scheme will re-open for continuous Sale and Repurchase within 5 Business Days from the date of allotment of units under NFO
• Investment Objective: To provide long-term capital appreciation by investing predominantly in equity and equity related securities of companies engaged in the manufacturing activity.
• Benchmark Index: Nifty India Manufacturing Index (TRI)
• Fund Manager:
  • Mr. Rakesh Sethia (Fund Manager and Senior Equity Analyst)
  • Mr. Dhruv Muchhal (Equity Analyst and Fund Manager for Overseas Investments)
• Investment Plans :
  • Direct Plan
  • Regular Plan
•  Investment Options : Under Each Plan
  • Growth
  • Income Distribution cum Capital Withdrawal – Pay-out and Reinvestment of IDCW
• Minimum Application Amount:
  • During NFO Period Purchase / Switches: Rs. 100/- and any amount thereafter
  • During continuous offer period Purchase / Additional Purchase / Switch: Rs. 100/- and any amount thereafter
• Load Structure:
  • Entry Load : Nil Exit Load : In respect of each purchase/switch-in of units
  • Exit load of 1% is payable if units are redeemed/switched-out within 1 month from the date of allotment.
  • No Exit Load is payable if units are redeemed / switched-out after 1 month from the date of allotment.
• Scheme Documents: Click here for scheme documents
• Fund Manager Details: Rakesh Sethia is a Fund Manager and Senior Equity Analyst and has collectively
  • over 19 years of experience
  • 17 years in Equity research and 2 years in other corporate roles.
  • He covers Energy, Telecom, Logistics and Transportation and Consumer durables.
  • He joined HDFC Asset Management Company Ltd in May-2020.
  • Prior to that, he worked 11 years at Morgan Stanley group and 2 years at HSBC Securities and Capital Markets where he was leading equity research of Oil & Gas and telecom sectors.
  • Rakesh has done MBA in Finance from NMIMS, Mumbai in 2007. Rakesh is also a CFA Charter holder and certified FRM

Additional Points to Consider:

Groww Nifty Non-Cyclical Consumer Index Fund

• Benefits of Investing in NFOs: There are several potential benefits to consider when investing in New Fund Offers (NFOs):
• Access to Innovative Strategies: NFOs sometimes introduce new or specialized investment themes that existing funds might not offer. This allows you to potentially diversify your portfolio with unique investment approaches.
• Potential for High Returns: Since NFOs are new, you’re essentially getting in on the ground floor. If the fund performs well, you could benefit from the initial growth phase, leading to potentially higher returns compared to established funds.
• Lower Entry Cost (Sometimes): In some cases, NFO units are offered at a fixed launch price, often set at Rs. 10 per unit. This can make them attractive for investors starting with a modest budget.
• Capitalize on Emerging Trends: NFOs can be launched to target new or growing sectors or themes in the market. This allows you to potentially capitalize on these emerging trends early on.
• Flexibility (with Close-Ended Funds): Some NFOs might be close-ended funds. These offer flexibility in terms of when your money is invested in the market. Even if the NFO launch coincides with a market peak, the fund manager might hold a portion of your investment to deploy later, potentially at a more opportune time.

Remember: These are just potential benefits, and NFOs also come with inherent risks. Here are some things to keep in mind:

• No Track Record: Since NFOs are new, there’s no past performance data to analyze. Investing involves inherent risks, and past performance (if available) is not necessarily indicative of future results.
• Subscription Period: You typically have a limited window (around 10-15 days) to invest in an NFO. Make sure you do your research before the subscription period closes.
• Fees and Charges: Be mindful of any fees and charges associated with the NFO, such as subscription fees, management fees, and exit loads.

Overall, NFOs can be a good option for investors seeking exposure to new investment ideas and potentially higher returns. However, thorough research and a risk assessment are crucial before investing in any NFO.

Disclaimer: Advising readers to conduct their own research and consult a financial advisor before making any investment decisions.

Also read:

Premature Redemption of Sovereign Gold Bonds (SGBs) of 2017

Aditya Birla Fashion and Retail: Unlocking Value Through Madura Business Demerger

Sukanya Samriddhi Yojana (SSY)-2024

Sovereign Gold Bonds(SGB): A Safe Method to Buy Gold-2024

Public Provident Fund (PPF)

ITC Limited A Diversified Indian Conglomerate from 1910