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Aditya Birla Sun Life AMC Limited

Aditya Birla Sun Life AMC Limited

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    Aditya Birla Sun Life AMC Limited

    Who should invest in Transportation and Logistics fund?

    Sep 08, 2024
    5 min
    4 Rating

    The modern businesses are all about delivering better services at your doorstep, especially if their focus is on the movement of physical goods and people. The remarkable thread that connects these businesses with the common people in this growing economy is none other than transportation and logistics. So, you may want to stress this sector for its growth potential from a financial investment perspective.

    The mutual fund industry is a vast industry with investment branches in almost all sectors. Many AMCs, like Aditya Birla Sun Life Mutual Fund, have started seeping into this field by launching a new scheme, Aditya Birla Sun Life Transportation and Logistics Fund, providing an opportunity for investors to aim reasonable returns in the long run.

    What is transportation and logistics industry?

    The transportation industry isn’t restricted to pick-up and drop-off services; rather, it covers a holistic view of the automobile industry. You might wonder how a transportation service penetrates different sub-sectors like auto manufacturers, auto ancillaries (component suppliers), etc. An automobile is complex machinery comprising individual parts like nuts, screws, etc. Each part is itself an entire manufacturing industry.

    Logistics is the most fundamental component of supply chain management that delivers goods from manufacturers to other businesses and customers. Rails, inventory management, courier services, warehouses, etc. are all part of

    Logistics and transportation management, together, can prove to be an explosive growth industry in the coming future due to their increasing demand in the global economy.

    Who can invest in the transportation and logistics fund?


    Long-term investors:

    A long-term equity investment is always an advisable option for investors to harness the power of compounding, which can help in capital appreciation. The transportation and logistics fund falls under this list as it may enjoy the benefits of a growing economy. A long-term investment can also be a good option for managing market risks.


    Risk tolerant investors:

    A risk-free mutual fund investment is an unfulfilling dream for every investor, but investors cannot escape the universal mutual fund philosophy that higher risks can potentially yield higher rewards. The transportation and logistics industry is subjected to fluctuating fuel prices, inflation, and changing economic factors that totally increase the risk. However, these funds may perform better for an extended period of time.


    Diversification-seeking investors:

    As explained earlier, the transportation and logistics industry has different levels, where each level is itself a sub-industry. Investing in this fund means you may invest in varying sub-sectors like truck transportation services, automobile manufacturing, infrastructure industries, rails, etc., essentially promoting diversification in your mutual fund portfolio.


    Technology-driven investors:

    Technology will always hold the position of a significant revolutionary movement that transformed people’s lives entirely. For investors fascinated by technology-driven growth, there can’t be any better fund than this one. Constant innovations like electric vehicles (EVs), AI-driven supply chain management, etc. have been game-changers in the logistics and transportation markets.


    Seeking retirement options:

    Considering its long-term growth potential, the transportation and logistics fund can be a strategic addition to your portfolio. Financial planning for retirement now reduces the stress you may have to deal with when you retire, as it requires building a larger corpus to sustain your retired lifestyle. The probability of achieving this bigger feat reduces as time progresses, as fewer years are available for investment. Hence, starting an early SIP in this fund can give you a good chance of living your retired life the way you want.

    Aditya Birla Sun Life Transportation and Logistics Fund: An Overview

    A thematic open-ended fund investing up to 80–100% in equities following the transportation and logistics theme and 0–20% in other securities, its aim is on providing reasonable returns to the investors over a longer period. It is actively managed, aiming at strategizing holdings in the portfolio according to market trends, fundamental analysis, technical analysis, etc., to potentially earn higher returns.

    Conclusion

    A transportation and logistics fund can truly serve as a golden chance for investors to earn reasonable returns. The industry is booming, with many opportunities expected to grace this sector in the future. It is advisable to consider investing in this fund for a long-term period. However, investors must conduct an extensive study of any fund before investing.

    The Scheme does not guarantee/indicate any returns. There is no assurance that the objective of the Scheme will be achieved. Aditya Birla Sun Life AMC Limited /Aditya Birla Sun Life Mutual Fund is not guaranteeing/offering/communicating any indicative yield/returns on investments.

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.