ICICI Prudential Bharat Consumption Fund: Why a Valuable Investment?

Introducing the ICICI Prudential Bharat Consumption Fund

The ICICI Prudential Bharat Consumption Fund is a thematic mutual fund designed to capitalize on the rising consumption trends within India. Launched on April 12, 2019, this open-ended equity scheme primarily invests in the equity and equity-related securities of companies that are poised to benefit from increasing consumer spending across the country. With a focus on long-term capital appreciation, the fund targets sectors such as consumer goods. Services and retail, which are set to thrive in a consumption-driven economy.

Both beginner and seasoned investors may find the ICICI Prudential Bharat Consumption MF a compelling option. Given its strategic focus, strong performance, and experienced management.

As India’s consumer base expands, driven by economic growth and evolving lifestyles, this fund offers a promising investment path to tap into the country’s consumption story. Let’s begin a detailed review of this fund.

The first step is analyzing the performance of this thematic fund.

Performance of ICICI Prudential Bharat Consumption Fund

Since its inception, the fund has showcased strong returns, outperforming its benchmark, the NIFTY India Consumption Total Return Index. Key performance figures include:

• 1-Year Return: Approximately 43.48%
• 3-Year Return: About 23.17%
• Annualized Return Since Inception: 17.58%

These numbers reflect the fund’s capacity to deliver significant returns by effectively identifying growth opportunities within the consumption space.

This performance track record positions the ICICI Prudential Bharat Consumption Mutual Fund as a high-potential investment for those seeking returns above market averages.

The second step is to understand the functions of this unique fund of ICICI Prudential Mutual Fund.

Core Functions of the ICICI Prudential Bharat Consumption Fund

Here are some core features to learn about this consumption theme fund:

1. Investment Objective: The ICICI Prudential Bharat Consumption Fund aims to generate long-term capital growth by allocating at least 80% of its assets to equities of businesses involved in consumption-based sectors. These sectors include FMCG, automobiles, retail, and consumer services, all of which are key components of India’s consumer-driven economy. This approach enables the fund to take advantage of rising consumption trends, as India continues to grow into one of the world’s largest consumer markets.
2. Expense Ratio: The expense ratio for the regular plan of the fund stands at 2.07%, which is slightly above the category average of 1.71%. While the expense ratio is a bit higher. The fund justifies this cost through its consistent outperformance and robust portfolio management, ensuring that investors benefit from superior returns.
3. Fund Size: As of March 31, 2024, the fund manages a total of ₹2,239.50 crore in assets. This substantial Assets Under Management (AUM) reflects investor trust and the fund’s growing popularity, with a larger AUM allowing the fund to spread its investments across diverse sectors within consumption.
4. Minimum Investment: The fund is accessible to a wide audience, with a minimum lump sum investment requirement of ₹5,000. Investors can also opt for a Systematic Investment Plan (SIP) with contributions as low as ₹100 per month, making the fund an attractive option for both small and large investors.
5. Exit Load: To encourage long-term investing, the ICICI Prudential Bharat Consumption Scheme applies an exit load of 1% if units are redeemed within three months of investment. This aligns with the fund’s objective of providing value over a long-term horizon.

Next, you will see some compelling reasons to choose this fund for your portfolio.

Why Choose the ICICI Prudential Bharat Consumption Fund?

Here are some amazing points to set your mind to add this fund to your portfolio:

1. Benefit from India’s Growing Consumption

India’s consumption landscape is rapidly expanding due to factors such as an increasing middle class, urbanization, and rising disposable incomes. By investing in the ICICI Prudential Bharat Consumption Fund, investors gain exposure to companies that are well-positioned to thrive amid these trends. Sectors such as consumer goods, services, healthcare, e-commerce, and automobiles stand to benefit significantly from the rising consumer demand.

2. Proven Track Record of Performance

The fund has consistently outperformed its peers and benchmark, providing strong historical returns since its launch. This track record demonstrates the fund’s ability to not only survive but thrive through market cycles. Making it a reliable choice for investors seeking robust returns.

3. Risk Diversification

By investing in a variety of consumption-related industries, the fund offers built-in diversification, which spreads risk across different sectors. This diversification helps cushion against the underperformance of any single sector, ensuring a more balanced approach to growth and reducing overall portfolio risk.

4. Expert Management

Led by professionals like Priyanka Khandelwal, the fund’s management team brings significant experience and in-depth market insights to the table. Their active management approach ensures that the fund navigates market challenges effectively and identifies promising growth opportunities, enhancing the potential for sustained returns.

5. Long-Term Growth Potential

With a focus on long-term growth, this fund is ideal for investors who have a multi-year investment horizon. India’s consumption sector is set to grow steadily as the country’s economy expands, making this fund an appealing option for investors who seek to benefit from long-term trends in the market.

6. Alignment with India’s Economic Growth

The consumption sectors that the fund invests in align well with India’s overall economic development. As the economy continues to grow, driven by urbanization and increasing consumer spending. The fund’s portfolio is well-positioned to capture these growth opportunities, further enhancing its attractiveness to investors.

Final Note

In short, if you seek to diversify your portfolio, include this fund via SIP to boost your chances of making high returns. Likewise, planning an investment horizon for 5 years or more is the best investment strategy advised by many experts. So, you might just grab your chance to take advantage of the growing consumer market and enhance your portfolio’s returns.