Introducing the ICICI Prudential Bharat Consumption Fund
Did you know multiple investment choices will double your money? Though these varied options can be a bit confusing, how would you pick the winners? That is why, ICICI Prudential Bharat Consumption Fund which invests in consumer-related goods is the best fit for your portfolio.
In this article, you will learn all the necessary things about this fund which will complete your portfolio requirements. Let’s begin by discussing the key features of this scheme.
Key Features of ICICI Prudential Bharat Consumption Fund
Here are some points highlighting the features of this consumption fund
- Investment Objective
The primary objective of the ICICI Prudential Bharat Consumption Mutual Fund is to generate long-term capital appreciation by investing at least 80% of its net assets in companies that are expected to benefit from rising domestic consumption. These companies span a variety of sectors that are directly impacted by consumer spending, making this fund well-suited to capture the benefits of increasing demand in India.
- Expense Ratio
The fund has an expense ratio of 1.14%, slightly above the average in its category. The expense ratio represents the fees charged by the fund for managing investments and other administrative costs. While a higher expense ratio can impact overall returns, the fund’s performance has shown that it provides good value for the cost, particularly for long-term investors.
- Minimum Investment
Accessibility is a major advantage of this fund. Investors can begin their journey with a minimum lump sum investment of ₹5,000, while additional investments can be made with as little as ₹1,000. Additionally, the fund offers a very affordable Systematic Investment Plan (SIP) option, with a minimum SIP amount of just ₹100, making it highly accessible even for small-scale or new investors.
Performance of ICICI Prudential Bharat Consumption Fund
Track the performance of this fund with the following points:
The ICICI Prudential Bharat Consumption Fund has demonstrated strong performance since its inception. Here are some key performance metrics:
- 1-year return: 41.77%
- 3-year return: 25.79%
- Since inception (CAGR): Approximately 19.0%
These figures illustrate the fund’s ability to generate substantial returns over time, consistently outperforming its benchmark index and many of its peers in the thematic fund category. The impressive performance reflects the fund’s strategic focus on high-growth sectors within the consumption space.
How ICICI Prudential Bharat Consumption Fund Distributes its Assets?
The fund diversifies its investments across various sectors related to consumption, primarily focusing on industries like:
1. Consumer staples: Essential goods that consumers continue to buy, regardless of the economy’s ups and downs.
2. Consumer discretionary: Goods and services that are non-essential but desirable, such as automobiles, electronics, and luxury products.
3. Services sector: Companies that provide services like retail, hospitality, and entertainment.
This broad-based exposure to consumption-oriented sectors reduces the fund’s concentration risk and increases its ability to generate consistent returns, even during market volatility.
Let’s see how much returns the benchmark gave:
The fund is benchmarked against the NIFTY India Consumption Total Return Index, which tracks the performance of companies involved in the consumption sector. This benchmark provides an accurate measure of how well the fund performs relative to the overall market for consumption-related companies.
Why Invest in ICICI Prudential Bharat Consumption Fund?
The following points give convincing reasons to include this stock in your portfolio:
- Capitalizing on Consumption Growth
India’s consumption sector is on the cusp of exponential growth, driven by factors such as a burgeoning middle class, increasing urbanization, higher disposable incomes, and changing consumer behaviors. The ICICI Prudential Bharat Consumption Scheme allows investors to gain exposure to companies that are expected to benefit directly from this increasing demand. Sectors like retail, consumer durables, and e-commerce are set to experience rapid expansion, and this fund is well-positioned to capture these trends.
- Strong Historical Performance
The fund has consistently outperformed both its benchmark and peers, showcasing its potential to deliver high returns over the long term. The fund’s historical performance is a testament to its ability to navigate market fluctuations while seizing growth opportunities in the consumption sector. For investors seeking benchmark-beating returns, this fund represents a reliable option with a proven track record.
- Diversification Benefits
By investing in a broad range of companies across different consumption-related sectors, the fund provides diversification, which helps spread the risk of poor performance in any single sector or company. This diversification ensures that the portfolio remains resilient, even during economic downturns, enhancing the fund’s overall risk-adjusted returns.
- Professional Management
Experienced professionals who have deep expertise in understanding market trends and analysing opportunities within the consumption sector manage the fund. Their insights and proactive approach to managing the portfolio ensure that the fund is well-positioned to capture emerging trends and navigate any risks.
- Long-Term Growth Potential
With its focus on sectors that are set to grow in alignment with India’s economic progress, the ICICI Prudential Bharat Consumption Mutual Fund is designed for investors with a long-term horizon. By investing now, you can benefit from compounding returns over time, as the consumption sector continues to expand and mature.
- Accessibility
One of the fund’s standout features is its low entry barrier. With a minimum lump sum investment of ₹5,000 and a low SIP option starting at ₹100, this fund is accessible to a wide range of investors, making it easy to start your investment journey without needing a large initial sum.
Considerations Before Investing in ICICI Prudential Bharat Consumption Fund
While the ICICI Prudential Bharat Consumption Fund offers excellent growth potential, investors should be aware of a few considerations:
- Market Risks: Like all equity investments, this fund is subject to market risks. The value of the fund can fluctuate based on changes in the market, company performance, and broader economic conditions. Investors should be prepared for potential volatility in the short term, although the fund’s diversification can help mitigate some of these risks.
- Investment Horizon: The fund is ideal for investors with a long-term investment horizon. If you are looking for quick returns or need immediate access to your funds, this may not be the best option. A minimum investment horizon of 5-7 years is recommended to fully realize the benefits of this equity-focused fund.
- Exit Load: If investors redeem their units within three months of investment, they will incur an exit load of 1%. This fee is designed to discourage short-term trading and ensure that the fund remains focused on long-term capital appreciation.
Summary
If you are an investor with an active management style then it is the perfect match for you. Just keep investments for at least 5-7 years following a systematic investment plan or SIP. It will add more freedom to adjust your portfolio from time to time.
