The SBI Automotive Opportunities Fund is an open-ended equity scheme launched by SBI Mutual Fund, focusing on automotive and allied business activities. The fund aims to generate long-term capital appreciation by investing in equity and equity-related instruments of companies engaged in this sector. The thematic focus includes original equipment manufacturers (OEMs), auto component manufacturers, electric mobility, and export opportunities within the automotive industry.
Understanding SBI AUTOMOTIVE OPPORTUNITIES FUND
Stock picking will be done using active investment strategy by focusing on robust fundamentals and navigating through conducive environment of growth for auto segment. The aim will be to capitalize on growth trajectory of auto and auto ancillary companies. Few of the segments that would be explored for investment are given below. Note that these are some of the segments within the auto universe, but the list is not exhaustive.
Investment Strategy
The Fund Manager will have the discretion to invest in all those sectors / areas which are engaged either directly or indirectly in the automotive & allied business activities theme. The investment strategy of the Scheme would focus on identifying and investing in companies engaged in automotive & allied business activities theme from domestic as well as global universe.
Further, to achieve diversification the Scheme may also invest residual net assets i.e. up to 20% of the net assets in companies other than automotive & allied business activities theme.
Key Features
- Income Growth: In the US, the number of cars per 1000 people is 860, in Germany it is 627 whereas in China the number is 233, In contrast, India still has around 34 cars per 1000 people.
- Industry Growth Projections: The automotive industry in India is projected to grow from %117 billion in 2023 to US$ 188 billion by 2029 (source: Mordor Intelligence). The auto components sector currently stands at US$71 billion is expected to reach $130 billion by FY29. (Source: Ricardo analysis)
- EV Market Evolution: The EV (Electric Vehicle) market in India is forecasted to expand from $5.61 billion in 2023 to %37.7 billion by 2028. (Source: Mordor Intelligence).
- Vehicle Credit expansion: As per RBI Data, vehicle finance is among the largest loan segment within retail and commercial credit. The Total vehicle loan book is around Rs. 15 trillion as on date, and it is growing at mid-to-high teens over the last couple of years.
- Government Policies and Initiatives: Policies like the productions linked incentive (PLI) scheme, 100% FDI Allowance, Automotive Mission Plan (AMP) 2016-26, Vehicle Scrappage Policy (launched in 2021), and Faster Adoption and manufacturing of Hybrid & Electric Vehicles (FAME) scheme are expected to drive industry growth and innovation.
Benefits for Investors
- Sector-Specific Growth: The automotive sector in India is expected to grow significantly, driven by supportive government policies such as the Production Linked Incentive (PLI) scheme, Vehicle Scrappage Policy, and FAME initiatives. These policies are designed to boost manufacturing, enhance export potential, and promote the adoption of electric vehicles
- Innovation and Modernization: With increasing emphasis on safety features and emission standards, automotive companies are investing heavily in innovation. This creates opportunities for substantial growth in both traditional automotive and emerging electric vehicle markets
- Active Stock Picking: The fund managers employ an active investment strategy, focusing on companies with robust fundamentals and strong growth potential within the automotive industry
- Equity Focus: As an equity-focused fund, it aims to generate long-term capital appreciation, which can be particularly beneficial for investors with a long-term investment horizon
he SBI Automotive Opportunities Fund is an open-ended equity scheme launched by SBI Mutual Fund, focusing on automotive and allied business activities.
SIPs are good but even better when markets are HIGH
To Invest in SBI AUTOMOTIVE OPPORTUNITIES FUND (NFO) contact us…
SBI AUTOMOTIVE OPPORTUNITIES FUND (NFO) Details
| Particular | Details |
| NFO Open | 17 May 2024 |
| NFO Close | 31 May 2024 |
| NFO Re-Open | 11 Jun 2024 (Tentative) |
| Scheme TYPE | Open-Ended |
| Purchase Mode | Lumpsum & SIP both |
| Minimum Application Amount | ₹5000/- and any amount thereafter |
| Benchmark | Nifty Auto TRI |
| Fund Manager | Mr. Tanmaya Desai Mr. Pradeep Kesavan (overseas securities) |
| Riskometer | Very High |
To Invest in SBI AUTOMOTIVE OPPORTUNITIES FUND (NFO) contact us…
SBI AUTOMOTIVE OPPORTUNITIES FUND (NFO) Objectives
- To generate long-term capital appreciation
- The investment objective of the scheme is to generate long-term capital appreciation to unit holders from a portfolio that is invested in equity and equity related instruments of companies engaged in automotive & allied business activities theme.
Considering the high valuations at the current juncture, we recommend systematic investing via Systematic Investment Plan (SIP).
For Details Reports Please download the Presentation, SID, KIM from below…
Risk Discloser – MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. The Scheme being sectoral in nature carries higher risks versus diversified equity mutual funds on account of concentration and sector specific risks. Investors should consult their financial advisers, if in doubt about whether the product is suitable for them. The product labeling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made.
