ICICI Pru MF has launched a transport and logistics fund and the NFO will close on 20 October. | Techno Glob

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Transportation and Logistics Fund on 6 October 2022. The transparency program will follow the theme of transportation and logistics. The new fund offering will open on October 6, 2022 and close on October 20, 2022, the mutual fund house said in a press release.

He said the scheme will invest mostly in shares and equity bonds of companies involved in the transport and logistics theme. It will also invest in sectors and/or stocks that are part of the Nifty Transportation and Logistics TRI, a benchmark of the offering. The scheme will invest around 80 per cent in companies that are a part of the transport and logistics sector and 20 per cent in other equity/equity related instruments.

As the plan will follow a buy-and-hold approach, an investment horizon of at least five years is recommended.

Investments can be made in both regular and direct plans and in growth or dividend options. The minimum investment is Rs. 5,000 and multiples of Re. 1. The minimum additional application amount will be Rs. 1,000 and multiples of Re. 1. No admission charge; However, if the withdrawal is less than one month, it will be 1 percent of the relevant Net Asset Value (NAV).

ICICI Prudential Mutual Fund said that as a theme, transport and logistics are considered as an engine of economic growth and are expected to perform well in the near future.

ICICI Prudential Mutual Fund said there are many positive aspects to investing in the transport sector. A strong distribution network exists. It has a positive co-relationship with GDP and a negative capital operating cycle model of net cash balances for players. It also strengthens core return ratios.

Chintan Haria, Head, ICICI Prudential AMC said, “Transportation is an under-penetrated market in India. The government’s new logistics policy emphasizes that each sector plays a key role in the country’s economic development. Government initiatives to reduce costs and improve efficiency positively correlate with formalization of the economy and GDP growth; All stand to benefit the sector in the coming years. With muted performance over the past few years; We believe the theme is out of the woods and still has more legs to recover.”

He added: “Logistics, The arrival of economic transformation means a shift from the unorganized sector to support in the growth of the logistics space. India’s logistics market is estimated at $216 billion, of which it contributed only about 3.5 percent ($6-7 billion) in FY2020. We expect disruption and market share shift from unconsolidated players to consolidated players in the Indian e-Segment. Commercial exports are increasing. Going forward, government initiatives can reduce costs and increase efficiency.”

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