The Scheme is an open-ended thematic equity fund that will invest predominantly in equity and equity-related securities of companies engaged in Transportation and Logistics sector-related activities. The list of sectors/industries engaged in Transportation and Logistics sector-related activities such as 2/3 wheelers, abrasives, airline, auto components & equipment, batteries, etc. The Scheme shall invest up to 20% in other equities and equity-related securities such as overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity, and mutual funds.
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The objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in transportation and logistics sectors. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
Basic information about the NFO:
Pros and Risks:
Firstly let’s look at the pros:
- The benefit of diversification.
- The minimum investment is low and the SIP option is available so it is more accessible for small investors.
- Transportation and logistics are considered an engine of economic growth, and they are expected to do well in the near future.
- Support for the government to boost sector demand.
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Now, some of the risks involved:
- Different types of securities in which the Scheme would invest as given in the Scheme information document carry different levels and types of risk.
- Investment in Mutual Fund units involves investment risks such as trading volumes, settlement risks, liquidity risks, and default risks including the possible loss of principal.
Performance of benchmark (Nifty Transportation And Logistics TRI)
| Period | Nifty Transportation and Logistics TRI |
| 3-Year | 27.20% |
| 5-Year | 8.60% |
| Since Inception | 17.30% |
Verdict:
The government has been investing heavily in the transportation and logistics sector to boost the infrastructure and the overall demand nationally as well as internationally. These initiatives include various policies like the National Logistics Policy (NLP), Multi-Model Logistics Park (MMLP), Production Linked Incentives for the Auto sector, Clean Tech Scheme, FAME (Faster Adoption of Manufacturing of EVs), etc.
These government initiatives are expected to set the ball rolling for a bullish view on the transportation and logistics sector making it a ripe time to invest in the same. The fund manager for this fund is highly experienced and manages 2 other funds (ICICI Pru Long Term Eq (Tax Sav) Gr & ICICI Pru Small-cap Gr) with a combined AUM of Rs.31,781 Crs. There is also another fund in this theme (UTI transportation and logistics fund). After considering all the factors, we would recommend that investors with high-risk appetite who are willing to take exposure to a thematic fund and with long-term investment objective may consider this NFO.
Disclaimer:
This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision.
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