Slowing consumption has weighed on the performance of consumption funds over the past year. The ongoing Covid-led lockdown has added further pressure on the funds. Currently, there are seven funds in the category and these have delivered an average return of negative 11.5 per cent over the past one year.
Among the funds, BNP Paribas India Consumption, which was launched in September 2018, has been the top performer over the past year, capping its NAV decline to about 2 per cent, while others recorded much higher losses.
The fund is overweight on financial, services and construction sectors, but underweight on FMCG, automobile and consumer durable sectors.
HDFC Bank and ICICI Bank are its top holdings.
SBI Consumption Opportunities, a veteran in the FMCG category, has delivered a negative return of 22 per cent in the past one year. The scheme has allocated 30 per cent to FMCG stocks that have healthy fundamentals.
The fund is overweight on textiles and services sectors.
After a strong show in 2017, the fund has been lacklustre over the past two years which has kept the past three-year performance muted.
Mirae Asset Great Consumer, that delivered a negative return of 15.5 per cent, has invested about 39 per cent in FMCG stocks, and is also overweight on financials and consumer durable sectors. The scheme is underweight on automobile, communication and services sectors.
The top holdings are HDFC Bank, Tata Consumer Products and ITC with about 6 per cent exposure to each.
Over three- and five-year periods, ICICI Prudential FMCG has clocked positive returns of 2.9 per cent and 6.53 per cent, respectively, on an annualised basis, but over the past one year, it has slumped 10.7 per cent.
It predominately invests in FMCG stocks, and a small portion is allocated to services, chemicals and consumer durable sectors.
Thematic funds, in general, are risky owing to their narrow focus. Consumption funds, in particular, have largely concentrated portfolios.
The near-term downtrend in consumption can, hence, continue to impact the funds’ returns.
A revival in the economy and consumption can aid the performance of these funds in the long run.
A letter from the Editor
Dear Readers,
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Support Quality Journalism"consumption" - Google News
May 31, 2020 at 05:46PM
https://ift.tt/3dpOZmk
Consumption funds put up a sombre show - BusinessLine
"consumption" - Google News
https://ift.tt/2WkKCBC
https://ift.tt/2YCP29R
Bagikan Berita Ini
0 Response to "Consumption funds put up a sombre show - BusinessLine"
Post a Comment