Investing in India’s infrastructure backbone: Aditya Birla Sun Life Transportation and Logistics Fund

As India’s economy embarks on a vigorous growth trajectory, the transportation and logistics sector emerge as a beacon of investment opportunity. Aditya Birla Sun Life Transportation and Logistics Fund presents discerning investors with a strategic gateway to capitalize on this dynamic theme. This meticulously crafted fund harnesses the synergistic power of interconnected industries, encompassing passenger vehicles, commercial vehicles, auto components, logistics providers, e-commerce giants, ports, and airlines.

By blending structural and cyclical investment opportunities, the fund caters to diverse risk appetites through urban-rural and domestic-international diversification. Embracing the transformative edge of innovation, it positions your portfolio for the future. Join us on this exhilarating journey of wealth creation.

What drives the demand side of this theme?

•  India’s vehicle penetration levels are still relatively low, and the rising income of its citizens is poised to boost the auto segment. On the supply side, increased policy support for manufacturing can give a fillip to both domestic and export markets. The expansion of infrastructure—be it rail, road, or ports, combined with the Gati Shakti scheme—is a crucial driver in the development of logistics infrastructure.
•  The domestic automotive industry is expected to grow at high single-digit levels in 2023-24, a report by rating agency ICRA said. According to the report, the demand for the passenger vehicles segment is expected to grow at 6-9%, commercial vehicles by 7-10%, two-wheelers by 6-9%, and tractors by 4-6% in FY24.

Source – SIAM

• According to Businesswire, The Indian auto ancillary market is expected to reach Rs 7,294.99 billion by FY 2027, driven by a CAGR of ~12.06%. The market is segmented into organized and unorganized sectors, with the organized sector catering to OEMs and the unorganized sector supplying the aftermarket. By 2025, the Indian auto components market is expected to become the third-largest in the world.
• The India Freight and Logistics Market size is estimated at 288.18 billion USD in 2023 and is expected to reach 484.43 billion USD by 2029, growing at a CAGR of 9.04% during the forecast period (2023-2029).

The Aditya Birla Sun Life Transportation and Logistics Fund:

This open-ended equity scheme follows the Transportation and Logistics theme. Its investment objective is to achieve long-term capital appreciation by investing in equity and equity-related securities of companies within this theme. The fund doesn’t guarantee or indicate any returns, but its track record suggests promising growth.

Portfolio Construction:

This fund employs an active management strategy and allocates a minimum of 80% (up to 100%) to equity and equity-related instruments of companies in the Transportation and Logistics theme. The Automobiles sector accounts for 57% of the total, followed by the Auto Ancillary sector with 25%, and the Logistics & Others sector with 18%.

Who Should Invest?

• First-Time Equity Investors: If you’re stepping into the world of equities for the first time, this fund provides you with the expertise of experienced fund managers.
• Long-Term Investors:  Those with a 3-5 years investment horizon will find this fund aligning perfectly with their goals.
• Investors Seeking Long-Term Capital Growth: If you’re looking to create long-term wealth through one of the vibrant themes of the Indian economy, specifically amenable to SIP investing, this fund is your ideal choice.

Why Invest in Aditya Birla Sun Life Transportation and Logistics Fund?

• Long-Term Growth Potential: Harness the growth potential of the vibrant and fast-growing Transportation and Logistics theme to build wealth over time.
• Diverse Investments: Enjoy a diversified portfolio with stocks from ~20 different industries, spanning urban and rural, domestic and international markets. It’s a slice of India’s growth story.
• Expert Guidance: Benefit from experienced fund managers and analysts who handle stock selection for you, making investing easier and more rewarding.
• Affordable Entry: You can start your investing journey with this fund with as little as Rs 500. It’s a small step that can lead to significant financial gains.

Information about the fund:

Aditya Birla Sun Life Transportation & Logistics Fund is managed by a dynamic pair of fund managers. Dhaval Gala, focused on harnessing the growth potential of the transportation and logistics sector, partners with Dhaval Joshi, who manages overseas investments within the fund. This dynamic duo has collectively overseen several funds within the same company, delivering exceptional returns over the past years. The performance details for these funds are provided below.

The fund’s NFO is open from October 27, 2023, to November 10, 2023, and it does not charge any entry load. However, an exit load of 1% of applicable NAV is applicable for redemption/switch-out of units on or before 365 days from the date of allotment.

In conclusion, Aditya Birla Sun Life Transportation and Logistics Fund is strategically positioned to leverage the burgeoning opportunities within the Indian transport and logistics sector, presenting a lucrative path in India’s robust economic landscape.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.