IDFC Mutual Fund on Monday launched the IDFC Transportation and Logistics Fund, an open-ended equity scheme aiming for multi-year growth opportunity in the mobility services sector, the fund house said. The new fund offer (NFO) opens on October 4, 2022, and closes on October 18, 2022.
Highlighting the grounds for launching the scheme, IDFC Mutual Fund CEO Vishal Kapoor said that rapid urbanization and “powerful enablers like a strong demand-led recovery cycle and margin improvement provide visibility for strong earnings growth for the transportation and logistics sector.”
He emphasised that rising aspirations, enhanced infrastructure, and a surge in volumes and export-driven opportunities will likely accelerate growth in the sector.
Kapoor said an IDFC team with a strong pedigree and expertise in leveraging the opportunities across the value chain would actively manage the fund.
Fund Manager Daylynn Pinto added that the sector comprises 16 sub-sectors that offer a broad spectrum of investment opportunities and adequate portfolio diversification.
Data provided by the fund house showed the Nifty Transportation and Logistics Index had outperformed the Nifty 500 Index in eight out of 11 calendar years from 2012 to 2022 (as of August 2022).
Key Features Of The Fund
The fund will have a bottom-up stock selection approach with investment across market cap segments. It is expected to focus on business-specific aspects with a medium to long-term view. It will invest primarily in transportation and logistics sector companies, with the flexibility to allocate up to 20 per cent of its net assets to global businesses and sectors with a “compelling risk-reward opportunity.”
The scheme is suitable for investors seeking wealth creation over the long term. The minimum subscription amount for lumpsum purchase during the NFO is Rs 5000, and after that, in multiples of Rs 1. The minimum systematic investment plan (SIP) amount is Rs 100, and thereafter, in multiples of Rs 1.
One per cent of applicable net asset value (NAV) will be charged if redeemed or switched out within one year from the date of allotment and zero charges after a year.
The IDFC Transportation and Logistics Fund will track the Nifty Transportation & Logistics Index.
The fund house said it would prioritize the stock’s competitive positioning, management quality, and earnings trajectory (CME approach) in building the portfolio. It noted that this approach would help focus the portfolio’s quality and growth aspects.