Trump’s 25% auto tariff: Should mutual fund investors with exposure in auto funds be worried?

President Donald Trump’s proposed 25% tariff on auto imports has ignited discussions among investors and analysts, particularly concerning its potential impact on mutual funds with significant holdings in automotive stocks. This tariff, aimed at bolstering domestic automotive manufacturing, could lead to increased costs for auto manufacturers.

Consequently, the profitability and stock prices of companies within the automotive sector might be adversely affected, thus impacting mutual funds heavily invested in these stocks.  As auto companies encounter heightened import costs, these funds could experience a downturn in value.

The potential for diminished profitability within the automotive sector may prompt fund managers to reconsider their investment strategies, possibly reducing their allocation in auto stocks to mitigate potential losses. Mutual funds, which typically spread risk across various sectors, may need to rebalance their portfolios to guard against potential losses in the automotive sector. 

Funds in focus

Five notable funds — SBI, HDFC, ICICI Prudential, UTI, and Bandhan — are tapping into this theme with high allocations to auto stocks and logistics-related businesses.

While SBI’s fund maintains the highest exposure to auto stocks (96.98%), Bandhan has the lowest (71.37%), indicating varying degrees of diversification across logistics and mobility ecosystems. Common holdings across most funds include Maruti Suzuki, Tata Motors, M&M, TVS Motor, and Eicher Motors.

 

</p><table><caption>Transportation & Auto Sector Mutual Funds Comparison</caption><thead><tr><th>Fund Name</th><th>Launch Date</th><th>Auto Stock Exposure</th><th>Key Holdings</th><th>Sector Focus</th></tr></thead><tbody><tr><td>SBI Automotive Opportunities Fund</td><td>June 2024</td><td>96.98%</td><td>M&M, Maruti Suzuki, Tata Motors, TVS Motor, Eicher, Samvardhana Motherson, Sona BLW, ZF CV</td><td>Pure-play automotive and supply chain</td></tr><tr><td>HDFC Transportation & Logistics Fund</td><td>August 2023</td><td>83.14%</td><td>Maruti Suzuki, Eicher Motors, Hyundai, Bajaj Auto, Bosch</td><td>Broad transport/logistics with strong auto tilt</td></tr><tr><td>ICICI Pru Trans. & Logistics Fund</td><td>October 2022</td><td>72.75%</td><td>M&M, Maruti Suzuki, Tata Motors, TVS Motor, Eicher Motors</td><td>Transportation infra, logistics, e-commerce growth</td></tr><tr><td>UTI Transportation & Logistics Fund</td><td>Ongoing scheme</td><td>74.83%</td><td>M&M, Maruti Suzuki, TVS Motor, Tata Motors, Eicher, Sharda Motor, Pricol</td><td>Rail, shipping, cargo, logistics infra</td></tr><tr><td>Bandhan Trans. & Logistics Fund</td><td>Ongoing scheme</td><td>71.37%</td><td>Tata Motors, Eicher Motors, Hyundai Motor India</td><td>Transportation, trade-linked logistics</td></tr></tbody></table><p>Financial experts suggest that investors should closely monitor developments related to the proposed tariffs and their impact on mutual funds. As markets adjust to potential new tariffs, active management of investment strategies will be crucial.</p></div><p><br /> <br /><a href="https://www.businesstoday.in/personal-finance/investment/story/trumps-25-auto-tariff-should-mutual-fund-investors-with-exposure-in-auto-funds-be-worried-471814-2025-04-12?utm_source=rssfeed" target="_blank" rel="noopener">Source link </a></p><div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-icon-text sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-facebook"><a rel="nofollow noopener noreferrer" data-shared="sharing-facebook-307431" class="share-facebook sd-button share-icon" href="https://groyourwealth.com/economy/trumps-25-auto-tariff-should-mutual-fund-investors-with-exposure-in-auto-funds-be-worried/?share=facebook" target="_blank" aria-labelledby="sharing-facebook-307431" > <span id="sharing-facebook-307431" hidden>Click to share on Facebook (Opens in 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