Introducing Consumption Mutual Funds
Do you want to know how Consumption Mutual Funds are related to consumers?
Let’s understand it, Consumption Funds are a subset of Thematic Funds.
Now you will think about what thematic funds are.
Let’s discuss this, As the name suggests the funds that invest in different themes. In other words, investing in stocks of specific ideas or themes.
These themes can be of different types such as manufacturing, innovation, pharma, and transportation.
Back to the point of understanding Consumption Funds. As it is already said, they are a subset of Thematic Funds, which means they invest in a particular theme.
The theme of Consumption Funds is investing in the equity of companies that are involved in or expected to make profits with consumption-related activities.
In other words, Funds that invest in the companies that are involved in the production of goods and services that a consumer uses regularly.
What do you mean by Consumption Mutual Funds?
Even Mr. Amar Ranu the Head of Investments and Insights said “The rapid increase of emerging trends that includes formalization (shifts the increased market share towards organized sectors such as textiles, footwear, jewelry, and tiles, etc.), urbanization (changing lifestyle that leads to increase demand in real estate), premiumization (moving towards the high priced offerings and brands like fashion, beauty, and Auto, etc.) has become a broad range of consumption-driven theme that will upgrade more efficiently in up and coming years.”
Simply you can understand that these categories of thematic mutual funds invest in companies that cater to the rising consumers’ needs and understand the market traits of consumers’ spending.
These funds aim to capitalize on the economic growth. This equity fund investment works as a bridge between the companies and the user.
The rise in the company’s stocks improves its portfolio reflected in the upswing of funds value.
You will be amazed to know that various segments deal with Consumption MFs such as automobiles, FMCG (Fast-Moving Consumer Goods), telecom, and pharma as well.
Are you still excited to get more knowledge about these consumer-driven funds?
Let’s dive into the pool of consumer-driven funds.
Why you should invest in Consumption Mutual Funds?
Are you ready for diving?
Okay, let’s know why you should invest your stocks and beliefs in Consumption Mutual Funds.
In a healthy market, where economic growth becomes more important, it satisfies the users’ demand which results in long-term potential growth as well as profits that improve the investors’ portfolio.
The companies build trust in users by understanding their marketing traits which helps them gain high returns from the funds.
This link between consumer demand and economic growth shows that rising consumer needs and demands help to invest more which has created a strong economy in recent years.
As an investor, you should have sufficient knowledge that connects you more to these equity funds for long-term growth.
Which are the 4 Best Consumption Mutual Funds?
Here is the analysis of 4 best thematic consumption funds mentioned below:
- SBI Consumption Opportunities Reg. Gr.
This scheme was established on July 14, 1999, and aims to provide an opportunity to investors for long-term capitalization by investing in various equity and equity-related securities under the consumption space.
Currently, the funds are managed by the Fund Manager Mr. Ashit Desai since April 1, 2024. He has working experience with Emkay Global Financial Services Ltd., SBICAP Sec. Ltd., and Batlivala & Karani Sec. Ltd..
The Assets Under Management (AUM) since its establishment are Rs. 3,100.76 Crores.
The CAGR meaning the returns since its launch is 17.74%.
- Tata India Consumer Reg. Gr.
This scheme was launched on December 12, 2015, and seeks consistent and long-term results by investing 80% of net assets in consumption-oriented companies.
Mr. Sonam Udasi has been managing the funds since April 16. He has worked with Tata Asset Management Company (AMC), also worked with JM Financial AMC, Prime Securities, ASK Raymond James, and IDBI Capital Market Services Ltd.
Assets Under Management (AUM) since its launching is Rs. 2,522 Crores along with CAGR return of 18.96%.
- HSBC Consumption Reg. Gr. Funds
The HSBC Consumer Fund scheme was recently organized on August 31, 2023. Funds are managed by Mr. Anish Goenka with experience working with L&T Mutual Funds and IIFL AMC.
Assets Under Management (AUM) since its beginning is Rs. 1,622 Crores with CAGR of 43.29%.
- Mirae Asset Great Consumer Reg. Gr. Funds
Mirae Asset Consumer Funds was established on March 29, 2011. Recently, funds have been tracked by Mr.Siddhant Chhabria, and Mr.Ankit Jain.
AUM since its beginning is Rs. 4,496.23 Crores. The return of the scheme till now is 18.37%.
Now, let’s move forward to know what steps are followed to invest in consumption-oriented funds.
What are the Steps to invest in Consumption Mutual Funds?
Here are the below-mentioned steps that will guide you to invest in consumption-oriented funds.
Step 1: Choose the Fund House
Select a reliable Fund House that can provide funds according to your requirements.
Step 2: Selection for the Platform
Go for the desired platform accordingly as you can get exposure to more options regarding funds.
Step 3: Decision Making for Investing
Decide whether you opt for SIP (Systematic Investment Plan) for regular offerings or go with Lumsum investments.
Step 4: Verification Process
Complete your KYC (Know Your Account) details verified including your details such as name, email, phone number, ID proofs, etc.
Step 5: Begin with the Investment
Start investing online using the desired platforms, as well as offline by investing through finance advisors.
Step 6: Monitor your Investments
You can keep track of your investments and redeem them accordingly.
Now let’s have a look at the merits related to these thematic funds.
How do Consumption Mutual Funds benefit you?
There are the following points that assure you about the advantages of consumption mutual funds:
- Investing in a wide range of sectors balances the investments and also reduces the risk of loss.
- As users spend more on goods and services directly increases the funds of companies, and so do the investors.
- Investors have long-term growth in their returns by investing in consumption funds that include a variety of sectors.
- Managed by professional fund managers who invest in companies going with the market flows.
- Moreover, these funds participate in the company’s investments of all sizes according to consumers’ marketing traits.
Let’s have a quick summary of this article piece.
The Bottom Line
Binding up the analysis with a summary that Thematic Consumption Funds work according to consumers’ demands and needs that elevate the market trends as well as the economic growth.
Investors can invest in SIPÂ at regular intervals for rising significant returns and improve their portfolios.
