LIC Mutual Fund launches Manufacturing Fund, targets Rs 60,000 cr AUM

LIC Mutual Fund on Friday launched a new Manufacturing Fund, an open-ended equity scheme, and said it is looking to achieve an asset under management of Rs 60,000 crore this fiscal.

The new fund offer (NFO) will remain open for subscription till October 4 while the units under the scheme would be allotted on October 11, the company said. It also said that the scheme will be benchmarked to the Nifty India Manufacturing Index (Total Return Index).

The scheme aims to provide a diversified portfolio of companies that come under the ambit of manufacturing theme, including automobiles, pharmaceuticals, chemicals, heavy engineering products, metals, shipbuilding, and petroleum products, among others, the company said.

"The main objective of launching the manufacturing fund is to create wealth for the investors who will be joining this scheme and which will be mainly investing into manufacturing theme companies," R K Jha, Managing Director and Chief Executive Officer, LIC Mutual Fund told PTI.

On AUM growth expectations, Jha said the company is growing at 25 per cent and is looking to achieve an AUM of Rs 60,000 crore for this fiscal with plans to hit the Rs 1-lakh crore mark by FY2025-26.

He said that LIC Mutual Fund already has an infrastructure fund, which is number one among all its industry peers with more than 75-80 per cent returns in one year.

"If you take a 2-3 years horizon, then the return rate is 35-45 per cent, and there also we are in quartile 1. So, in all the segments whether it is 1, 2, 3 or four years, we are doing exceedingly well as the rate of return is concerned," he said.

Jha said that the new scheme targets sectors such automobiles, auto ancillary, pharma, capital goods as well as consumption and added that there are quite a good many sectors, which we will be taking into consideration with an approach that will be both top down and bottom up for selection of stocks.

Explaining the contours of the Manufacturing Fund, Jha said that an investor can invest a minimum amount of Rs 300 in SIP on a daily basis and Rs 1000 on a monthly basis with quarterly pegged at Rs 3,000.

"But going forward after the NFO closes (on October 4) and reopens on October 16, the amount of daily SIP will be further reduced to Rs 100 while monthly SIP will be lowered to Rs 200 so all such investors having low income and who want to start with small SIP numbers can also join it.

"Also, those who want to invest in lump sum or in one time, they can start with a minimum amount Rs 5,000 and there is no upper limit either for SIP or in lump sum amount. So people can invest any amount in the manufacturing fund," he said.

Jha said that there are 11 different manufacturing funds in the market of different Asset Management Companies (AMCs) with total AUM at around Rs 34,700 crore.

"If one goes by other funds like large caps or flexi cap funds or midcap funds, the total AUM is more than Rs 3.84 lakh crore. So this is just the beginning of the Manufacturing Fund that we are going to launch," he said.

Jha also said that LIC Mutual Fund is looking to come out with an initiative by early next month, offering lower SIP of Rs 100 per day and Rs 200 per months as against Rs 300 per day and Rs 1000 per months now, so that even people with lower income can join the SIP bandwagon.