Insights into ICICI Prudential Bharat Consumption Fund
The ICICI Prudential Bharat Consumption Fund is a thematic mutual fund and was created to invest in consumption themes in India. This diversified open-ended equity scheme was started on, 12 April -2019 This provides investors a golden chance to enter into the consumption-driven economy of India as a result of the growing new generation Investor population, Urbanization & Higher Disposable income. The fund primarily invests in equities and equity-linked products in industries that include consumer products and automobiles, retail, consumer goods, health care services, and others.
Since it opened for business it has been delivering good returns and enjoys correct sector positioning. Therefore, for anyone who wants to diversify their portfolio with steady, long-term capital gains, this could not be a better
investment opportunity.
In this article, you will get a clear understanding of whether you need this fund in your portfolio or not. Let us start the analysis.
Characteristics of the ICICI Prudential Bharat Consumption Fund
Investment Objective
Another fund that aims to generate long-term capital gains is the ICICI Prudential Bharat Consumption Fund, which allocates 80% of its total assets to domestic company stocks and associated instruments that are expected to gain from India’s overall domestic consumption narrative. They have companies in a variety of industries, including media and services, fast-moving consumer goods and durables, clothing and accessories, entertainment, cars, and medicines. The fund offers investors a well-organized platform to engage in the spending boom of a changing economy while also attempting to capitalize on India’s growing consumer spending trend.
Performance
The fund has consistently demonstrated strong returns, outperforming its benchmark, the NIFTY India Consumption Total Return Index, over various periods:
- 1-Year Return: 43. 48%
- 3-Year Return: 23. 17%
- Since Launch (April 2019): 17. 58%
These performance numbers are proof of the ability of the fund to identify and invest in opportunities in the Indian consumer market and its capacity to generate high returns for investors. This is a general performance that speaks volumes about the selection of the stock, active management of the fund. And flexibility to manage the market swings.
Expense Ratio
The expense ratio of the ICICI Prudential Bharat Consumption MF is two. 07 % and this is slightly above the 1% that most other categories attract. 71%. The expense ratio is the cost of operating the fund and is calculated as the fund’s annual fees such as administration and other operational charges. Although this firm comes with a higher expense ratio, this is justifiable because of its impressive performance. Coupled with its professional management hence offering value to the investors who are in it for long-term profits.
Fund Size
On March 31, 2024, the total assets of ICICI Prudential Bharat Consumption Fund Assets Under Management (AUM) stood at about ₹2,239. 50 crore. That is why the AUM or assets under management comprise a large amount of money and have increased over the last few years proving the efficiency of the fund strategy and its management. A higher AUM usually entails increased steadiness, as well as a wider degree of freedom for the managers of the fund in terms of its portfolio investments. And the ability to manage market adversities.
Minimum Investment
The ICICI Prudential Bharat Consumption Fund has low minimum investment hence making it open to most investors. Investors can buy the fund directly with a minimum investment amount of ₹5000 for lump sum investment or can invest through SIP mode with a minimum amount of just ₹100 per month. As such. The fund can accommodate small and large investors who have the freedom to invest based on their size and capital.
Exit Load
Additionally, the fund levies an exit load of 1% on units that are redeemed within three months of purchase. This makes it possible to hold long-term which is by the objective of the fund to unlock long-term consumption patterns. The fund does not charge this fee to those investors who remain invested for a long time; this supports the fund’s idea of wealth creation in the long term.
Why Invest in ICICI Prudential Bharat Consumption Fund?
Here are some strong reasons to add this fund to your portfolio:
1. India’s Consumption Boom an Opportunity
This has also been attributed to factors such as; the growing middle class, urbanization. Higher disposable income per capita and changes in lifestyle in the country. These factors are expected to create demand for products and services in various sectors including FMCG, retail. Automobiles, healthcare and entertainment. Through the ICICI Prudential Bharat Consumption Fund, you can align your portfolio to such consumption-led growth drivers to capture India’s growth story.
2. Strong Historical Performance
On analysing its performance against benchmark and peers for different time horizons. Investors have benefited by getting superior returns for the ICICI Prudential Bharat Consumption Fund. The excess returns to the indices are 43 for one year. Institutional investors the returns in the range of 48 % and their 3-year return is 23. 17% focus on the fact that the fund offers high returns and affordable charges especially when other similar funds are performing badly due to volatility. From this it is evident that the fund has long-term wealth creation ability hence it will be worthwhile for rich investors who seek high returns.
3. Diversification Benefits
Investing in the fund also diversifies the risk because the fund’s investments are across the different sectors and companies. This is due to its diversified portfolio where it invests in many businesses that operate under the consumption zone hence if one business fails to perform then the fund is cushioned by other businesses that are excelling. This diversification a step higher may provide an extra layer of security for the investors and will enable them to capture the consumption basket companies.
4. Professional Fund Management
The mandate of the ICICI Prudential Bharat Consumption Fund is in the hands of highly experienced professionals. Who have rich experience in India’s consumption space and overall market. The fund managers also take time to research the various stocks to be invested in ensuring that they invest in quality stocks of companies they forecast will be impacted by the consumption rates in the long run. Fund managers are in a position to guarantee such rates by their abilities to find growth opportunities. And minimize risks associated with dismal returns on equity investments in the future.
Final Note
If you are an investor seeking active management, then this fund is perfect for you. Just make sure you take the long route that is keeping investment time of 5-7 years via SIP. This will make sure you keep your portfolio streamlined and give it the necessary time to reach its full growth.
