Publish Date:
UTI Mutual Fund has launched UTI Nifty India Manufacturing Index Fund, it is an open-ended equity scheme replicating/ tracking Nifty India Manufacturing TRI.
Over the past decade, initiatives like 'Make in India,' Digital India, and Start-up India have laid a strong foundation for industrial growth, driving investments in sectors such as automobiles, electronics, chemicals, pharmaceuticals, and defence manufacturing. As India aspires to become a USD 5 trillion economy, manufacturing is set to play a pivotal role, with an ambitious target to contribute 25% to the GDP in the coming years.
[Read: Top Manufacturing Mutual Funds in India to Boost Your Portfolio]
The Union Budget 2025-26 has provided a fresh impetus to this growth narrative, with strategic allocations aimed at strengthening the manufacturing ecosystem. The budget also emphasizes supply chain resilience, technology adoption, and skill development, ensuring that India remains competitive in the global market while fostering self-reliance.
In line with this growth trajectory, the launch of NFO - UTI Nifty India Manufacturing Index Fund, offers investors a timely opportunity to participate in India's industrial renaissance.
Details of UTI Nifty India Manufacturing Index Fund:
|
Investment Objective |
The Investment objective of the Scheme is to provide returns that, before expenses, corresponds to the total return of the securities as represented by the underlying index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved. |
|
Category |
Index Fund |
|
SIP/STP/SWP |
Available |
|
Min. Investment |
Rs 1,000/- and in multiples of Re 1 thereafter. Additional Purchase Rs 1,000/- and in multiples of Re 1 thereafter. |
Face Value |
Rs 10/- per unit |
|
Plans |
Direct
Regular |
Options |
Growth |
|
Entry Load |
Not Applicable |
Exit Load |
Nil |
|
Fund Manager |
Mr Sharwan Kumar Goyal
Mr Ayush Jain |
Benchmark Index |
Nifty India Manufacturing TRI |
|
Issue Opens: |
January 28, 2025 |
Issue Closes: |
February 10, 2025 |
(Source: Scheme Information Document)
What will be the investment strategy for UTI Nifty India Manufacturing Index Fund?
UTI Nifty India Manufacturing Index Fund is a low-cost index Fund which tracks the Nifty India Manufacturing Index passively. The scheme endeavours to achieve return equivalent to underlying index while minimizing tracking error.
UTI Nifty India Manufacturing Index Fund will be managed passively with investments in stocks comprising the Underlying Index subject to tracking error. The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the Scheme.
A part of the funds may be invested in debt and money market instruments, to meet liquidity requirements.
About Nifty India Manufacturing Index
Nifty India Manufacturing Index is designed to track the performance of companies that play a significant role in India's manufacturing sector. This index comprises a diversified portfolio of stocks from industries such as automobiles, capital goods, chemicals, metals, pharmaceuticals, textiles, and more, reflecting the broad spectrum of India's industrial landscape.
The stocks are selected from a combined universe of Nifty 100, Nifty Midcap 150 and Nifty Smallcap 50 index.
(Source: NSE: Nifty India Manufacturing Index)
The index includes companies from various sub-sectors like automobiles, chemicals, engineering goods, industrial machinery, cement, steel, and pharmaceuticals, providing a comprehensive view of the manufacturing ecosystem.
It comprises large-cap, mid-cap, and selected small-cap stocks, representing companies that are leaders in their respective industries, both in terms of market capitalization and revenue generation. To maintain relevance, the index undergoes semi-annual rebalancing, ensuring that it reflects the latest market dynamics and the evolving manufacturing landscape in India.
How will the scheme allocate its assets?
Under normal circumstances, UTI Nifty India Manufacturing Index Fund will hold an allocation of 95% to 100% in Equity and Equity related Securities of companies constituting Nifty India Manufacturing Index and 0% to 5% in Debt / Money Market instruments including Triparty Repo on Government Securities or treasury bill and units of Liquid Mutual Fund.
Should investments in UTI Nifty India Manufacturing Index Fund be considered?
UTI Nifty India Manufacturing Index Fund offers investors an opportunity to tap into India's rapidly growing manufacturing sector. This fund tracks the Nifty India Manufacturing Index, which comprises companies from diverse manufacturing sub-sectors.
Given the government's strong push under initiatives like 'Make in India' and the Production-Linked Incentive (PLI) schemes, the manufacturing sector is poised for significant growth, making this fund an attractive option for long-term investors.
The Union Budget 2025-26 has further boosted this momentum through increased allocations for industrial corridors, logistics, and digital infrastructure. Additionally, India's strategic shift towards becoming a global manufacturing hub amidst supply chain diversification from China presents substantial growth opportunities.
By investing in a broad range of manufacturing companies, the fund reduces the risk associated with single-sector investments. Being an index fund, it offers a cost-effective structure with lower expense ratios compared to actively managed funds.
However, potential investors should also consider the sector-specific risks associated with this fund. The manufacturing sector is cyclical and sensitive to factors like raw material price fluctuations, global demand-supply dynamics, and currency volatility. Moreover, any changes in government policies, regulatory hurdles, or geopolitical tensions can impact the sector's growth prospects.
Therefore, this fund is better suited for investors with a long-term horizon who can withstand short-term market fluctuations.