List of Best Manufacturing Mutual Funds in India
India’s manufacturing sector is emerging as a key pillar of economic growth. In FY24, it contributed nearly 17% to GDP, with gross value added rising 11.9% to ₹24.6 lakh cr. Supported by initiatives such as Make in India and Production Linked Incentive (PLI) schemes, the sector spans industries from automobiles and electronics to cement and chemicals. Mutual funds focusing on manufacturing allow investors to gain exposure to this expanding industrial ecosystem through a structured, thematic route. This article will cover the list of best manufacturing funds along with the taxation, advantages, risks, and factors to consider before investing in these funds.
List of Best Manufacturing Sector Funds
Here’s the list of 10 best manufacturing funds sorted by 3Y CAGR as of September 18th, 2025.
| Name | AUM | CAGR 3Y | Expense Ratio |
|---|---|---|---|
| HDFC Manufacturing Fund | 11,537.31 | 0.00 | 0.77 |
| ICICI Pru Manufacturing Fund | 6,602.43 | 27.68 | 0.73 |
| Axis India Manufacturing Fund | 5,344.77 | 0.00 | 0.52 |
| Canara Rob Manufacturing Fund | 1,625.44 | 0.00 | 0.75 |
| Baroda BNP Paribas Manufacturing Fund | 1,242.88 | 0.00 | 0.86 |
| LIC MF Manufacturing Fund | 827.26 | 0.00 | 0.64 |
| Mahindra Manulife Manufacturing Fund | 805.68 | 0.00 | 0.72 |
| Motilal Oswal Manufacturing Fund | 786.43 | 0.00 | 0.86 |
| Invesco India Manufacturing Fund | 779.04 | 0.00 | 0.77 |
| Quant Manufacturing Fund | 769.01 | 0.00 | 0.88 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the list of the manufacturing funds is from September 18th, 2025. This data is derived from the Tickertape Mutual Funds Screener.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Best Manufacturing Mutual Funds
HDFC Manufacturing Fund
HDFC Manufacturing Fund invests in companies in India’s industrial and manufacturing sectors. The portfolio includes automobiles, capital goods, engineering, and related industries. It focuses on capturing growth opportunities from India’s expanding production and industrial ecosystem.
ICICI Prudential Manufacturing Fund
ICICI Prudential Manufacturing Fund targets firms in engineering, automobiles, cement, and capital goods. The scheme provides exposure to India’s industrial development driven by policy initiatives and rising demand. It maintains equity orientation and sectoral diversification.
Axis India Manufacturing Fund
Axis India Manufacturing Fund invests in companies that benefit from India’s manufacturing growth. The portfolio covers capital goods, metals, automobiles, and chemicals. The fund follows a thematic strategy aligned with industrial expansion and trends in domestic and global supply chains.
Canara Robeco Manufacturing Fund
Canara Robeco Manufacturing Fund invests in listed companies from India’s industrial and manufacturing sectors. The portfolio includes capital goods, automobiles, construction materials, and engineering firms. It reflects the cyclical nature of manufacturing and opportunities from infrastructure and economic growth.
Baroda BNP Paribas Manufacturing Fund
Baroda BNP Paribas Manufacturing Fund invests across manufacturing-driven businesses in engineering, automobiles, and related industries. The fund holds equity across multiple industrial sub-sectors to capture growth trends from rising demand, policy reforms, and India’s evolving role in global manufacturing supply chains.
LIC MF Manufacturing Fund
LIC MF Manufacturing Fund invests in companies operating in India’s manufacturing and industrial ecosystem. The portfolio includes automobiles, metals, chemicals, and engineering firms. It gives thematic exposure to industrial development and long-term prospects linked to the nation’s production-driven economic activities.
Mahindra Manulife Manufacturing Fund
Mahindra Manulife Manufacturing Fund invests in companies across India’s manufacturing and industrial sectors. It focuses on engineering, capital goods, and auto-related businesses. The fund captures opportunities from policy-led industrial growth, rising domestic consumption, and expanding global manufacturing participation.
Motilal Oswal Manufacturing Fund
Motilal Oswal Manufacturing Fund invests in companies shaping India’s industrial and production sector. It covers capital goods, automobiles, metals, and chemicals. The fund provides thematic exposure to the manufacturing cycle influenced by domestic growth, policy measures, and global trade patterns.
Invesco India Manufacturing Fund
Invesco India Manufacturing Fund invests in firms across the Indian manufacturing sector, including engineering, automobiles, and capital goods. The fund aligns with India’s industrial expansion and captures value from the country’s increasing role in domestic and global supply chains.
Quant Manufacturing Fund
Quant Manufacturing Fund invests in equities of companies from manufacturing and allied sectors. The portfolio includes engineering, automobiles, and materials. The fund follows a dynamic allocation approach that responds to sectoral and market trends shaping manufacturing opportunities.
What are Manufacturing Mutual Funds?
Manufacturing mutual funds are equity funds that focus primarily on businesses involved in production and industrial development. They may include companies from:
- Capital goods
- Cement and construction materials
- Automobiles and auto components
- Engineering and machinery
- Metals and chemicals
- Textiles and industrial services
Being thematic funds, their performance depends heavily on the manufacturing cycle and policy environment.
Taxation on Manufacturing Mutual Funds
Since many manufacturing mutual funds in India are equity-oriented (index funds or active equity funds), their taxation follows the rules for equity mutual funds as per the 2024 Union Budget.
| Type of Fund | Holding Period | Tax on Gains |
| Equity-oriented (65%+ equity in manufacturing/industry stocks) | Short-Term: < 1 year | 15% STCG |
| Long-Term: ≥ 1 year | 12.5% LTCG above ₹1.25 lakh (Budget 2024 rule) | |
| Hybrid or Debt-oriented manufacturing funds | Gains taxable at 12.5% without indexation | – |
How to Invest in Manufacturing Funds?
You can easily start to invest in manufacturing funds by following these steps:
- To invest in the best manufacturing funds, you can visit a mutual fund investment platform such as smallcase.
- The next step is to research and identify the manufacturing mutual funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a manufacturing mutual fund SIP, and complete the process.
Features of Manufacturing Mutual Funds
- Thematic Exposure: These funds specifically target companies in the manufacturing and industrial sectors, unlike diversified equity funds that spread across industries.
- Equity Orientation: Most manufacturing funds hold more than 65% of their portfolio in equity shares of manufacturing and allied companies, qualifying them for equity taxation.
- Diversified Across Manufacturing Sub-sectors: While the core theme is industrial growth, portfolios often include a mix of large-cap, mid-cap, and small-cap manufacturing firms to balance stability with growth potential.
- Cyclical Nature: Since manufacturing activity depends on economic expansion, government spending, and private sector investment, fund performance tends to move with the economic cycle.
- Higher Volatility: These funds may see sharper ups and downs than broader equity funds due to sector-specific concentration.
Advantages of Manufacturing Mutual Funds
- Exposure to India’s Industrial Growth: With initiatives like PLI and Make in India, manufacturing has been receiving policy support, and these funds provide exposure to this theme.
- Indirect Participation in Capital Expenditure: As companies expand factories, plants, and industrial capacity, manufacturing funds capture the growth of such businesses.
- Multi-sector Participation Within Manufacturing: These funds don’t just invest in one industry but span across automobiles, engineering, cement, metals, and chemicals, offering some level of diversification.
- SIP and Lump Sum Flexibility: Like all equity funds, investors can opt for systematic investment plans or lump sum contributions, giving flexibility in how capital is deployed.
Risks of Manufacturing Mutual Funds
- Sector Concentration Risk: Since the portfolio is concentrated in one sector, underperformance of the manufacturing industry can drag down fund returns.
- Economic Cycle Dependence: Manufacturing activity usually rises during economic expansion and slows during downturns. Funds are therefore cyclical in nature.
- Commodity Price Sensitivity: Many manufacturing companies rely on raw materials like metals, oil, and chemicals. Volatility in these prices impacts profitability and, in turn, fund performance.
- Policy and Global Risks: While domestic policy support may benefit the sector, global recessions, trade barriers, or supply chain disruptions can pose risks.
Factors to Consider Before Investing in Manufacturing Mutual Funds
- Risk Appetite: Since these are high-risk, high-reward funds, they may suit investors who can handle volatility.
- Investment Horizon: Manufacturing cycles often take years to play out. These funds generally suit investors with medium-to-long-term goals.
- Expense Ratio: Some thematic funds charge a higher expense ratio. Therefore, it becomes important to evaluate fund costs when comparing schemes.
- Sector Outlook: Monitoring government policy, private capital expenditure, and global demand trends can help in understanding the manufacturing sector’s position in the cycle.
Who Can Consider Investing in Manufacturing Mutual Funds?
- Thematic Investors: Those who want targeted exposure to a specific growth story within the economy.
- Sector-savvy Investors: Those who understand the cyclical nature of industries like capital goods, engineering, and automobiles.
- Portfolio Diversifiers: Investors who already hold diversified equity funds but want to add a manufacturing theme for broader exposure.
- Balanced Risk Takers: Investors who are comfortable with short-term volatility in exchange for possible long-term growth linked to industrial expansion.
To Wrap Up…
Manufacturing mutual funds channel investments into India’s industrial sector. They mirror the growth prospects and risks of the country’s production economy. As with all thematic funds, performance depends on sector trends and policy changes. When comparing manufacturing mutual funds, the investors may use Tickertape Mutual Fund screen and use more than 200 filters.
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Frequently Asked Questions About Manufacturing Funds
The manufacturing mutual funds are thematic equity funds that invest in companies linked to manufacturing and industrial production.
Here is the taxation breakdown of manufacturing mutual funds:
– Equity-oriented funds are taxed at 15% for STCG (<1 year) and 12.5% LTCG beyond ₹1.25 lakh (post Budget 2024).
– Hybrid or debt-oriented manufacturing funds attract 12.5% tax without indexation.
The examples of manufacturing mutual funds include Motilal Oswal Manufacturing Fund, Invesco India Manufacturing Fund, and Quant Manufacturing Fund, which have high exposure to manufacturing and industrial sectors.
Manufacturing funds focus on a specific sector, so their returns depend on the performance of the industrial and manufacturing sectors.
Many manufacturing funds provide systematic investment plan options, which allow contributions at regular intervals. The investment decision depends on the investor’s risk appetite.
Manufacturing-focused funds are available in several developed markets, including the US and Japan, targeting companies in industrial sectors.
