Last Updated on Jul 22, 2024 by Harshit Singh
Motilal Oswal introduces its first ever active thematic fund with Manufacturing Theme (NFO Period from 19th July’24 to 2nd August’24). The fund is designed to capitalize on the current capex cycle.
Motilal Oswal Manufacturing Fund will be a uniquely positioned fund in its space with its Focused High Conviction Portfolio Construct of upto 30 stocks. With a portfolio selection based on the house identified high growth themes, the fund bets on India’s emerging status as a GLOBAL POWERHOUSE.
Table of Contents
Introducing Motilal Oswal Manufacturing Fund
Please find the link for the NFO PPT:
India – Time is Now
- The government plans to increase manufacturing’s share to 25% of the economy.
- The Manufacturing GVA is expected to grow 2.8x from FY23 to FY30E.
- With a ~800 USD Bn opportunity, the share of merchandise exports is expected to double to 3.5% in FY31E from 1.7% in FY21.
- The lower manufacturing wage cost of India compared to other SEA nations along with a labor productivity growth of 6.2% (better than China – 4.2%) for FY24 indicates India having an edge over other nations for more production.
- With China+1 theme playing out, India is expected to benefit from the shift of production outside China.
- The top 10 sectors based on weights in the manufacturing index are expected to benefit from the growth in India. The exposure of this sectors are significantly less in NSE 500.
Opportunities in Manufacturing
There are various sectors which have been identified to drive the manufacturing theme. These are EMS, Defence, Specialty Chemicals, Power, Wires and Cables, Auto and Auto Ancillaries, and many more.
Why Now?
- Due to the convergence of multiple trends in the same direction, there is a higher delta expected for the manufacturing theme from various economic activities.
- The Inflation (CPI) is expected to soften which can provide stability in the businesses.
- The CAD (Current Account Deficit) is also expected to improve to 1.6% as the focus on exports increases.
- India’s Forex Reserves have also been increasing gradually recently along with a stable currency.
- Repo rate has been consistent for the few months and is expected to lower in the coming monetary policy meetings
- There have been an array of reforms introduced by the government focused on the manufacturing and infrastructure push indicating government’s focus on the capex driven growth as mentioned earlier.
- With the introduction of the PLI scheme, the promoters are also encouraged to focus more on improving the quality and quantity of production. There can be investment of Rs. 1.2Tn every year to use the entirely allotted incentive from the scheme upto FY28.
- The capex for both government and private sector has been increasing exponentially over the last 5 years which benefits the economic activity growth. This has already been showcased in the infrastructure growth of Rails, Roads, Airports and Ports from 2014 to 2024.
- With capacity utilization levels at around 75%, the companies can gain from optimize better resource allocation, improved productivity and efficiency, and reduced costs and waste.
Why Motilal Oswal Manufacturing Fund?
- Manufacturing is already a key theme in our active schemes with ~Rs. 27,600 cr allocation in Manufacturing sectors.
- MOAMC has also spotted various multi-baggers over the last 5 years in its portfolios proving an expertise in understanding the space.
- Motilal Oswal Manufacturing Fund presents a compelling opportunity for investors seeking high growth potential in the thematic funds.
With a proven track record, a unique portfolio construct, and a commitment to expertise, Motilal Oswal invites investors to join this journey towards long-term wealth creation.
Disclaimer
This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions and features of Motilal Oswal Manufacturing Fund. The information / data herein alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this presentation are as on date and are subject to change without notice. While utmost care has been exercised while preparing this document, Motilal Oswal Asset Management Company Limited (MOAMC) does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Readers shall be fully responsible/liable for any decision taken on the basis of this presentation. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the Motilal Oswal Mutual Fund/Motilal Oswal Asset Management Company Limited. Readers should before investing in the Scheme make their own investigation and seek appropriate professional advice. Please read Scheme Information Document (SID) and Statement of Additional Information (SAI) carefully before investing . Past performance of the Sponsor/ AMC/ Mutual Fund and its affiliates does not indicate the future performance of the scheme and may not provide a basis of comparison with other investments. The Stocks/sectors mentioned above are used to explain the concept and is for illustration purpose only and should not be used for development or implementation of any investment strategy. It should not be construed as investment advice to any party. The stocks may or may not be part of our portfolio/strategy/ schemes. Past performance may or may not be sustained in future
Statutory Details: Constitution: Motilal Oswal Mutual Fund has been set up as a trust under the Indian Trust Act, 1882. Trustee: Motilal Oswal Trustee Company Limited. Investment Manager: Motilal Oswal Asset Management Company Ltd. (CIN: U67120MH2008PLC188186) Sponsor: Motilal Oswal Financial Services Ltd
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