Insights into Nippon India Consumption Fund
In the vast consumer market, there are lots of opportunities for you to take advantage of. Supposedly, you invest in a stock that makes you good returns from the things you use daily. Seems unreal right?
Yes, it is possible with a category called Consumption Mutual Funds. Now, you may wonder how to pick the winners.
To relieve your stress, it’s time for the big reveal of the Nippon India Consumption Fund, a theme-based scheme making high returns on consumer-related goods. It was introduced in the market on the 30th of September 2004 while also giving 16.77% returns since then.
In this post, you will learn about the key characteristics of this fund and also decide whether to take this fund under your portfolio or not.
Let’s begin the analysis by identifying the key features of this fund.
Main Functions of Nippon India Consumption Fund
Here are some key features that make this fund an attractive option:
- Investment Objective: The Nippon India Consumption Mutual Fund’s investment objective is to provide long-term capital appreciation having not less than 80% of its total assets under-investment in equities of companies that are expected to benefit from domestic consumption-led demand.
- Expense Ratio:Overseeing this fund has a 0.77 expense ratio while the actively managed funds category it belongs to avails a much higher average ratio. It is important to note that, in spite of the fact that lower fees have been shown to increase overall returns over the long term.
- Fund Size:In fact, as per the data available up to 31st August 2024, the company’s AUM is approximately ₹1,701 crore which clearly indicates that more and more investors are increasingly interested in investing in this fund.
- Minimum Investment:It is ideal for a low minimum investment of ₹500 through SIP (Systematic Investment Plan) therefore it suits all classes of investors.
- Exit Load:The fund also levies an exit load of 1% for units sold within one month meaning the investor loses out on this amount were they to hold the units for far less than one month enabling the fund to limit short-term trading that may distort the market.
Well, this begs a question, how is the performance of the Nippon India Consumption Fund? Let’s start with that.
Why Invest in Nippon India Consumption Fund?
These are the following reasons that make a strong case as to why invest in this fund:
- Capitalizing on Consumption Growth: Due to the growing economy of the world’s largest democracy, India, there is a growing sign of consumerism within the country and due to this, investing in this fund will enable you to invest within the sectors that are likely to benefit immensely with the growing consumerism. This is especially because income levels notably the rising middle population and the improved disposable income are strong consumption-determined factors.
- Strong Historical Performance:Looking at the performance of Nippon India Consumption MF, it has been seen that the fund has beaten its benchmark and competitors in a consistent way and thus makes the fund safe for investment for those investors who want to achieve high returns. The historical performance shows that the fund has the capacity to manage change in the market as well as identify growth opportunities to maximize.
- Diversification Benefits: The fund managers also manage diversification risk by investing in several companies in various segments of the consumption goods industry. It may improve the general vulnerability of the investment portfolio when diversification takes place.
- Professional Management: experienced professionals who understand the market and especially the consumption sector assist the fund. They can assist in managing the issues and opportunities smoothly.
- Long-Term Growth Potential: The Nippon India Consumption Fund is for anchor investors who make long-term investments and receive value-added returns from the consumption sector in the long run.
- Flexibility with SIPs:SIPs also enable small-scale investments to be made, with the Rupee cost average to the advantage of accumulating big capital to be earned in the process without a bigger stake.
Lastly, you will see if this fund is suitable for you or not.
Is Nippon India Consumption Fund the Right Choice for You?
Here are some examples to know if this fund is right for you or not:
- Seeking Long-Term Gains:If you are among the ones with patience and discipline, then you may find this fund a good option. Moreover, investing for a longer duration gives the necessary time for your investments to grow.
- Diversification Seekers: Though it is a sector-specific fund, consumption is a very vast theme that has lots of opportunities in itself that give all the distribution your portfolio needs.
- Expecting High Returns: As the consumption theme is related to consumer goods, there are a number of things for investment giving more opportunities to make high returns.
Final Note
To sum up, this theme-based fund is a good choice for you if looking to diversify your portfolios. Likewise, if you are new to investing, just make sure to invest for a longer time like 5-7 years. Moreover, taking a SIP route is much healthier and will help in decreasing risk.
