Top MFs: BOI AXA Manufacturing & Infrastructure Fund

Objectives

BOI AXA Manufacturing & Infrastructure Fund-Growth is a Sectoral-Infrastructure mutual fund scheme from BOI AXA Mutual Fund. The scheme seeks long term capital appreciation through a portfolio of predominantly equity and equity related securities of companies engaged in manufacturing and infrastructure and related sectors.

Fund Highlights

This fund has been in existence for 12 yrs, having been launched on 20/01/2010.

The fund has ₹71 Crores worth of assets under management (AUM) as on 31/12/2021 and is small fund of its category.

The fund has an expense ratio of 2.83%, which is higher than what most other Sectoral-Infrastructure funds charge.

The expense ratio of the fund is 1.28%

For units more than 10% of the investments, an exit load of 1% if redeemed within 1 year.

Minimum investment required is Rs 5000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 1000.

It is benchmarked against S&P BSE India Manufacturing Index.

Returns

BOI AXA Manufacturing & Infrastructure Fund-Growth returns of last 1-year are 46.98%. Since launch, it has delivered 9.33% average annual returns. The fund has doubled the money invested in it every 2 yrs.

Its trailing returns over different time periods are: 52.04% (1yr), 25.03% (3yr), 19.05% (5yr) and 15.38% (since launch). Whereas, Category returns for the same time duration are: 58.69% (1yr), 18.44% (3yr) and 14.04% (5yr).

Sectors and stock wise exposure

The fund has the majority of its money invested in Construction, Metals, Engineering, Energy, Automobile sectors. It has taken less exposure in Construction, Metals sectors compared to other funds in the category.

The fund's top 5 holdings are in Larsen & Toubro Ltd., TI Financial Holdings Ltd., Ultratech Cement Ltd., APL Apollo Tubes Ltd., Birla Corporation Ltd..

While the top 10 equity holdings constitute around 33.95% of the assets, the top 3 sectors constitute around 59.52% of the assets.

The fund largely follows a Growth oriented style of investing and invests across market capitalisations - around 25.34% in giant & large cap companies, 49.68% in mid cap and 24.69% in small cap companies.

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Fund Manager

The BOI AXA Manufacturing & Infrastructure Fund - Direct Plan is managed by Alok Singh (Since Feb 16, 2017).

Expert comment

This is a fund that invests mainly in shares of companies engaged in infrastructure-related activities or are expected to benefit from them. BOI AXA Manufacturing & Infrastructure Fund-Growth scheme's ability to deliver returns consistently is higher than most funds of its category. Its ability to control losses in a falling market is high.

The suggested investment horizon of investing into BOI AXA Manufacturing & Infrastructure Fund - Direct Plan is >3 years. The suggested investment horizon is the minimum time required for holding investments in the fund to reduce its downside risk and ensure that the returns become more predictable.