Top 5 Mutual Funds in the Transportation & Logistics Sector

The transportation and logistics sector is changing fast, thanks to new technology, big infrastructure projects, and people’s evolving needs. As India becomes a major global manufacturing hub and online shopping through e-commerce platforms keeps growing, transportation and logistics mutual funds are catching the eye of many investors. Let's look at why this sector is so important for 2025 and which funds are worth considering for your portfolio.

Why transportation & logistics is a sector to watch in 2025

India’s logistics and transportation space is being transformed by several key trends:

• Growth of e-commerce: Online shopping has increased demand for faster, smarter delivery networks and improved warehousing management. Companies that provide last-mile delivery, supply chain technology, and warehousing are seeing more business.
• Infrastructure upgrades: Big government projects like the National Logistics Policy and Bharatmala (highways) are improving road, rail, and port infrastructure. These efforts aim to bring logistics costs down, making it cheaper and faster to move goods around the country.
• Green mobility: There’s a strong push towards cleaner, greener transport. Commercial electric vehicles, better charging networks, and eco-friendly logistics solutions are all on the rise.
• Digital supply chains: Companies are investing in new tech—like artificial intelligence (AI) and the Internet of Things (IoT)—to make logistics smarter, more reliable, and cost-effective.
• Global opportunities: As global supply chains shift and India grows as a manufacturing hub, companies that offer quality logistics services stand to benefit.

These shifts are opening up new opportunities for growth, making this sector particularly promising for investors.

How sectoral mutual funds work: Should you invest?

Sectoral mutual funds focus investments on one specific industry, such as transportation and logistics, instead of diversifying the funds across many different sectors.

• How they’re different: Unlike general equity funds that include stocks from various industries, sectoral funds put most of their investments into one sector, giving targeted exposure to a theme.
• Higher risk, higher reward: If the sector performs well, the fund can deliver great returns. However, if the sector struggles, losses may be steeper compared to a diversified fund.
• Who should invest?: These funds are suitable for investors who believe in the sector’s long-term potential and are comfortable with ups and downs along the way. Sectoral funds are best used as a small part of your overall portfolio, not as the only investment.

What to look for when choosing a logistics sector fund?

Here are some key points for picking the best sector-specific mutual funds:

• Fund manager’s experience: Check the fund manager's background, especially experience in the transportation and logistics space. Skilled managers can spot the best opportunities and respond to changes in the market.
• Portfolio mix: A good fund doesn’t just pick one type of company. Look for a spread across shipping, roads, warehousing, railways, and technology, so your investment isn’t tied to just one part of the sector.
• Performance track record: Look for steady returns, especially during downturns in the sector. A fund that holds up well in both good and bad times shows strong management.
• Expense ratio: Lower costs mean more money stays in your pocket. Compare the expense ratios before deciding.
• Assets Under Management (AUM): Big enough AUM means better liquidity and trust, but not so big that it becomes hard to manage. Too small a fund might not be well diversified.

Top 5 mutual funds investing in the transportation & logistics space

Let’s look at the leading logistics sector mutual funds in India, based on assets, strategy, and performance as of July 2025:

• UTI Transportation & Logistics Fund: The largest and most established, invests across autos, logistics, ports, and supply chain tech. Good track record.
• ICICI Prudential Transportation & Logistics Fund: Wide participation across the sector, strong research, and broad coverage.
• Aditya Birla SL Transportation & Logistics Fund: Combines Indian and select global stocks, providing variety at a low cost.
• HDFC Transportation & Logistics Fund: Prioritises companies with solid business models and earnings visibility.
• Bandhan Transportation & Logistics Fund: Focuses more on warehousing and cutting-edge logistics solutions.

Final thoughts: Is this the right time to enter the sector?

The transportation and logistics sector stands at an inflection point. Government programs like Gati Shakti and the National Logistics Policy are making the sector more efficient and cost-effective. At the same time, new technology, growth in online shopping, and environmental trends are opening up big opportunities.

But remember: sectoral funds can swing up and down more than regular diversified funds. If you invest, be prepared for some bumps along the way, and make sure your overall portfolio is balanced. These funds work best as a “satellite” holding—meaning, just a part of your portfolio, not the whole thing.

For those believing in India’s growth and eager to participate in its new age supply chain story, top transportation mutual funds in India offer a promising (if sometimes bumpy) ride. Have a long-term view, keep your allocation sensible, and always match such investments to your own risk comfort.

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