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Manufacturing Mutual Funds Beat Benchmark, But Volatility Remains Higher
Manufacturing mutual funds invest mostly in companies connected to manufacturing.
Rules require thematic funds to put at least 80% of their money into stocks related to their theme.
Over the past year, all five funds listed earned more than the manufacturing index.
ABSL Manufacturing Equity Fund earned the most, with a 23.61% return.
However, earning more money can involve larger changes in value.
The manufacturing-fund category had average volatility of 18.15%, compared with about 15% for the index.
Volatility data was available for only two funds.
Their volatility was below the category average but slightly above the index’s volatility.
This means the funds performed strongly, but they were not less risky than the benchmark.
ABSL Manufacturing Equity Fund delivered the highest one-year return at 23.61%.
Kotak Manufacture in India Fund returned 18%, followed by LIC MF Manufacturing Fund at 16.31%.
Invesco India Manufacturing Fund and Axis India Manufacturing Fund returned 15.60% and 15.47%, respectively.
All five funds outperformed the Nifty India Manufacturing TRI, which returned 6.97% over one year.
The two funds with available volatility data were less volatile than the category average but slightly more volatile than the benchmark.
- Who
- The five manufacturing mutual funds compared, along with the Nifty India Manufacturing TRI benchmark.
- What
- The funds’ one-year returns were compared with the benchmark, and their volatility was assessed using standard deviation.
- Where
- The comparison concerns India-focused manufacturing investments.
- When
- Returns were reported as of 25 September 2026, covering the preceding one-year period.
- Why
- To determine whether actively managed manufacturing funds outperformed their benchmark and whether they did so with lower volatility.
Performance Benefits
Risk Considerations
Outperformance
Performance Benefits
All five manufacturing funds outperformed the Nifty India Manufacturing TRI over one year, suggesting active stock selection and portfolio allocation contributed to higher returns.
Risk Considerations
The comparison covers only a one-year period, and the article does not establish that the outperformance will continue.
Volatility
Performance Benefits
The two funds with available data had lower standard deviation than the manufacturing-fund category average of 18.15%.
Risk Considerations
Both funds were slightly more volatile than the benchmark, whose standard deviation was around 15%, so higher returns did not come with lower volatility than the index.
Key facts
- Top performer
- ABSL Manufacturing Equity Fund, with a 23.61% one-year return.
- Benchmark return
- The Nifty India Manufacturing TRI returned 6.97% over one year.
- Second-highest return
- Kotak Manufacture in India Fund returned 18.00%.
- Category volatility
- The manufacturing-fund category had average standard deviation of 18.15%.
- Benchmark volatility
- The Nifty India Manufacturing Index had standard deviation of around 15%.
- Available fund volatility
- ABSL Manufacturing Equity Fund recorded 17.82% standard deviation, while Kotak Manufacture in India Fund recorded 17.05%.
- Thematic-fund requirement
- Under Securities and Exchange Board of India rules cited in the article, a thematic fund must invest at least 80% of total assets in stocks linked to its theme.
Sources
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