Getty ImagesIn the past 10-15 years, an investment theme which has attracted high attention is consumption. Easy availability of finance, a young population and a relatively stable and functioning democracy are a few key reasons why foreign and other strategic investors have been bullish on India. These three key factors have ensured sustained interest in companies who are players in the consumption theme.
The faith in these factors has paid off. In the past four quarters, consumer-focused companies have successfully met earnings estimates at a time when most companies in several key sectors of economy have failed to meet analyst targets. This shows consumer-focused companies are delivering a stable performance. In a year, which has events that can trigger off high volatility in the markets, investments in consumer-focused companies would be a sensible idea for retail investors. A case in point is the current general elections, whose outcome could change the direction of the markets for the next one year.
Given these factors, investors can consider Aditya Birla India GenNext Fund. It has a performance record of over a decade. Among consumption-focused schemes, the scheme has delivered better performance than its peers. In the past three-year and five-year periods, the scheme has given 15% and 18% returns while its peers have delivered returns of 14% and 15%, respectively over the same periods. Investors should stay invested in the scheme with at least a five-year horizon.
Portfolio change (past 6 months)
Returns (in %)
Returns peer comparison (in %)
source: Accord Fintech, complied by ETIG Database
Expert Take
Harshvardhan Roongta, CFP, Roongta Securities
I believe retail spending in unlikely to be impacted even during slowdown in the economy. Hence, schemes which have a large number of companies from consumption sector are likely to work as a ‘safe haven.’ This scheme has been a consistent outperformer and investors can consider allocating around 10% of their portfolio with a holding period of at least five years.
The faith in these factors has paid off. In the past four quarters, consumer-focused companies have successfully met earnings estimates at a time when most companies in several key sectors of economy have failed to meet analyst targets. This shows consumer-focused companies are delivering a stable performance. In a year, which has events that can trigger off high volatility in the markets, investments in consumer-focused companies would be a sensible idea for retail investors. A case in point is the current general elections, whose outcome could change the direction of the markets for the next one year.
Given these factors, investors can consider Aditya Birla India GenNext Fund. It has a performance record of over a decade. Among consumption-focused schemes, the scheme has delivered better performance than its peers. In the past three-year and five-year periods, the scheme has given 15% and 18% returns while its peers have delivered returns of 14% and 15%, respectively over the same periods. Investors should stay invested in the scheme with at least a five-year horizon.
Portfolio change (past 6 months)
| New entrants | Complete exits | Increase in allocation |
| Alkem Labs | L&T Finance Holdings | Eris Lifesciences |
| Axis Bank | Cadila Healthcare | PNB Housing Finance |
| Jubilant FoodWorks | ICICI Lombard Gen Insurance | MRF |
Returns (in %)
| Period | CAGR return | SIP CAGR return | Thematic fund -AVG CAGR |
| 1 Year | 4.34 | 11.09 | 0.66 |
| 3 Year | 15.62 | 11.89 | 11.97 |
| 5 Year | 18.67 | 14.51 | 13.87 |
Returns peer comparison (in %)
| Scheme | 1-year | 3-year | 5-year |
| Quant Consumption Fund | -4.61 | 14.29 | 16.50 |
| Reliance Consumption Fund | -2.07 | 6.93 | 10.54 |
| Sundaramm Rural & Consumption Fund | -3.29 | 15.35 | 18.33 |
Expert Take
Harshvardhan Roongta, CFP, Roongta Securities
I believe retail spending in unlikely to be impacted even during slowdown in the economy. Hence, schemes which have a large number of companies from consumption sector are likely to work as a ‘safe haven.’ This scheme has been a consistent outperformer and investors can consider allocating around 10% of their portfolio with a holding period of at least five years.
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