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ICICI Prudential MF to launch transportation and logistics fund


Asset management company ICICI Prudential Mutual Fund has announced the launch of a transportation and logistics fund, an open-ended equity scheme investing in securities of companies engaged in transportation and logistics theme.

The new fund offer for ICICI Prudential Transportation and Logistics Fund will open on 6 October and close on 20 October.

The scheme may invest in sectors or stocks that form a part of Nifty Transportation and Logistics Total Return Index (TRI), which is also the benchmark of the offering. The scheme may follow a buy and hold approach and hence an investment horizon of a minimum five years is recommended.

According to the fund house, transportation and logistics theme is considered an engine for economic growth.

The theme consists of industries broadly classified under three key sectors which are auto original equipment manufacturers (OEMs), auto components (ancillaries) and logistics.

The auto OEM sector with its presence across different products offers multiple investment opportunities including auto ancillaries. Given rising fuel prices and increased focus to reduce emissions, countries globally have adopted EVs in a significant manner. India is expected to follow suit thereby giving rise to multiple investment opportunities.

Chintan Haria, head-product development and strategy, ICICI Prudential AMC, said, “Transportation is an under-penetrated market in India. The new policy on logistics by the government underlines the key role played by the sector in the economic growth of the country. The formalization of the economy and positive correlation to GDP growth and the government’s initiatives to reduce costs and improve efficiency, all stand to benefit the sector in the coming years. With muted performance in the last couple of years, we believe the theme is coming out of the woods and there are more legs to recovery.”

The fund house believes that formalization of economy i.e. shift from unorganized to organized sector aids in the growth of logistics space.

India’s logistics market is estimated at $216 billion, out of which organized players contributed only 3.5% ($6-7 billion) in FY2020.

Nifty transportation and logistics index performance offtake has just begun and is expected to continue its upward trajectory, says ICICI Prudential Mutual Fund

The fund will be managed by Harish Bihani and Sharmilla D’Mello (for overseas investments).

The minimum application amount during the NFO period would be 5,000 and in the multiples of Re 1, thereafter.

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