NFO- Birla Sun Life Manufacturing Equity Fund.- January 2015
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- NFO- Birla Sun Life Manufacturing Equity Fund.- January 2015
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Birla SunLife Mutual Fund launched new fund offer Birla SL Manufacturing Equity Fund, a closed ended scheme. The NFO Opens for subscription on 13th January 2015 & closes on 27th January 2015. No entry load will be applicable for the scheme.
|Scheme Name||Birla Sun Life Manufacturing Equity Fund.|
|Fund House||Birla Mutual Fund|
|Option||Growth / Dividend|
|Fund Manager||Mr.Anil Shah|
|Scheme Name||Birla Sun Life Manufacturing Equity Fund.|
|NFO Open||13 Jan 2015|
|NFO Close||27 jan 2015|
|Scheme Type||Open ended scheme|
|Minimum Application Amount||Rs 5000 and in multiples of Rs 1 thereafter|
|Load Structure||For Purchase during NFO : Entry - NIL Exit before 1 Year : 1.50% Exit after 365 days but before 540 days :1.00% After 540 days : Exit - NIL|
Cheque Details : “Birla Sun Life Manufacturing Equity Fund.”
Who can Invest
This product is suitable for investors:
- Seeking long term capital appreciation
- With risk appetite of investing in Equities
- Investors willing to take exposure in equity and equity related securities
- To Generate long term capital appreciation from a diversified portfolio of predominantly equity and equity related securities , including equity derivatives, in the Indian market with focus on small & mid cap stocks.
- Quality companies with potential high growth using strong fundamental research processes
- Help to create wealth by investing in the potential Leaders of tomorrow
Mr.Anil Shah: Mr. Anil Shah is a B.Com, M.M.S and Investment management program and Advanced Management Program frm Harvard Business School. He has overall experience of around 10 years in the financial markets. Prior to joining Brila AMC he has worked with ENAM AMC, Edelweiss Capital & KJMC Capital Ltd
The Manufacturing sector in India
- The manufacturing industry in India has gone through various phases of development over time. While manufacturing started picking up initially, it never developed to its full potential for a variety of reasons. With liberalisation and economy opening up, we saw an explosion in services sector and now it contributes about 55% of our GDP. This is clearly unsustainable from a growth & population point of view. India contributes 1 million new workforce additions each month.
- Despite the natural bounty of resources, and the abundant skilled & unskilled human resources, India’s growth in the manufacturing sector has been moderate due to mainly lack of focus on the same. Manufacturing sector currently contributes about 15% of India’s GDP and about 12% of the workforce in 2008. Every job created in manufacturing has a multiplier effect, creating 2–3 jobs in the services sector. In a country like India, where employment generation is one of the key policy issues, this makes this sector a critical sector to achieve inclusiveness in growth.
- Despite a focus on these areas per se, Auto & Pharma have been 2 very large success stories for Indian manufacturing. Cost & Quality have both contributed to India’s strong performance and made India a global leader. India is currently the fastest growing Auto market in world with all major MNC manufacturers setting up manufacturing in India for domestic or export opportunity and in Pharma, India owns a 80% volume market share of Generic drugs manufacturing!
Why we think the Manufacturing sector is the next big thing?
We have a very progressive Government with a solid track record of industrial growth and development in place and completely focused on manufacturing. Recently, the govt. launched the “Make in India” campaign which focuses exclusively on developing India as a manufacturing hub. The key growth drivers for the sector will be:
- Slew of reforms & focus on investment: New investment cycle & opening of FDI in key sectors like Defence & Railways will open floodgates for Indian cap goods while it will also make India a better place to do business for MNCs.
- Labour Cost & reforms: The cost of labor in India is cheaper than in most other countries, thus providing a competitive advantage to the country’s manufacturing sector. At the same time, many states have already started the process of overhauling the archaic labor laws benefitting many of these manufacturing sectors. Textiles is a clear beneficiary.
- Rise in export and domestic orders: Manufacturing activities have gradually risen due to new export orders and increased domestic demand recently
- Tax reforms: The Interim Indian Budget 2014-15 proposed changes in indirect taxes which include factory gate tax to be reduced to 10% from 12% on some capital goods and consumer durables as well as excise duty cut on small cars, two wheelers and commercial vehicles to 8% from 12%. GST implementation will put the wheels of development in high gear. Annual GDP growth could pick up 1 – 2 % p.a. on GST implementation alone. Consumer Goods, so far the bedrock of Indian economy, will be the biggest gainer from it.
Why invest in BSL Manufacturing Fund NOW?
It is a known fact for all of us that all large business houses are primarily manufacturers to start with and continue to dominate their respective industries. Whether we talk of Tata’s, Birla’s or Ambani’s, all have started the journey from manufacturing and continue to be excited with it, more especially now. With some shining examples of manufacturing successes in new age entrepreneurs like Sun Pharma, Maruti & Avantha Group etc, clearly there is loads of wealth to be created by investing in these businesses.
Some of our funds have already created wealth for investors by investing in these companies & sectors, now is the time to focus on the opportunity and make the most of it. This is the only fund in the market focusing on this theme while still being a diversified equity fund. In spite of focusing on just about 50% of total market cap, it outperforms a broad benchmark CNX500 across time frame in our back tests. The valuations of these sectors are more or less in line with long term averages and in most cases the strong fundamentals justify the slight premium that they might be carrying as well in specific cases. The businesses have a strong rerating potential on the back of the potential that they pack and it will be a huge miss if investors don’t catch it now.
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