LIC MF Manufacturing Fund

The LIC MF Manufacturing Fund has delivered a 1-year XIRR of 16.50%, which is 2.4 percentage points higher than the category average of 14.1%, indicating strong short-term performance. Over the same period, the fund's CAGR of 21.56% significantly outperformed the NIFTY 50's -2.9%, and it has consistently beaten the benchmark across all longer durations, though with modest absolute returns. The fund's 1-year rolling return of 13.58% is also above the category average, suggesting consistent performance for lump-sum investors.

The fund exhibits a maximum drawdown of -0.22% with a recovery period of 120 days, indicating relatively shallow and short-lived declines, though the average drawdown is -0.046% and there have been 3 drawdown events exceeding 10%, which points to occasional deeper losses. The Calmar ratio of 0.61 for 1 year suggests moderate risk-adjusted returns, as the fund generates 0.61 units of return per unit of drawdown. With a beta of 0.97, the fund's volatility is close to the market, but its downside capture of 77.1% indicates it falls less than the market during downturns, providing some downside protection.

The fund's top 10 holdings account for approximately 34.5% of the portfolio, with the largest positions in Tata Motors (combined 8.9%) and Sun Pharma (3.65%), indicating a tilt towards cyclical and defensive sectors. Sector concentration is high, with Automobiles (12.2%), Industrial Products (11.3%), and Auto Components (11.1%) together making up over 34% of the portfolio, reflecting a focused thematic approach. With 48 total holdings, the fund offers some diversification within the manufacturing theme, but remains heavily exposed to auto and industrial cycles.

The fund outperforms its category average on a 1-year basis (16.50% vs 14.1%), but lags significantly on longer horizons, with 3-year, 5-year, and 10-year XIRRs of 16.82%, 16.95%, and 16.71% respectively, compared to the fund's 1-year only data. The fund's calendar year returns show high volatility, with a strong 18.27% in 2026, a modest 3.64% in 2025, and a negative -3.39% in 2024, indicating inconsistent performance across market conditions. Despite this, the fund has consistently beaten the NIFTY 50 across all durations, with positive alpha and higher upside capture, though its absolute returns are low due to the benchmark's negative performance.

This fund is suitable for investors with a high risk tolerance and a long-term investment horizon (5+ years) who believe in the growth potential of the Indian manufacturing sector. It is not appropriate for conservative investors or those seeking stable income, given the sectoral concentration and cyclical nature of the holdings. Investors should be prepared for significant fluctuations in returns, as evidenced by the negative calendar year return in 2024, and should consider this as a satellite allocation within a diversified portfolio.

• Outperformed the category average by 2.4 percentage points on a 1-year XIRR basis (16.50% vs 14.1%)
• Consistently beaten the NIFTY 50 benchmark across all durations, with positive alpha and higher upside capture (107.86% for 1 year)
• Lower downside capture (77.1% for 1 year) indicates the fund falls less than the market during downturns, providing some cushion

• High sector concentration in cyclical industries (autos, industrial products, auto components) increases vulnerability to economic downturns
• Inconsistent calendar year returns, including a -3.39% loss in 2024, may test investor patience and discipline