Thriving with the Consumption Story
Mirae Asset Great Consumer Fund
For retail investors, India’s consumption story is key because they are a part of it. Among schemes that have a sharp focus on the consumption theme, Mirae Asset Great Consumer Fund has consistently delivered good returns. Currently, a large part (21.4%) of the scheme’s portfolio is exposed to banking and financials. One of the chief reasons for this is these sectors serve as backbone of the economy by funding growth. The scheme also has reasonably good exposure to other themes under consumption. These are consumer non-durables and automobiles.
In the coming quarters, there are two key factors which are expected to boost consumption on a large scale. First, the implementation of Seventh Pay Commission — as buying of cars and other consumer durables is linked to pay hike. Second, in the absence of any cut in interest rates, consumer durables companies may come up with discounts on occasions such as cricket IPL (television) or summer season (air conditioners) to lure consumers to maintain momentum in sales.
The scheme’s fund managers Neelesh Surana, Ankit Jain and Bharti Sawant have consistently stuck to the fund house’s philosophy of refraining from buying overvalued stocks and instead focussing on those companies which have high cashflows and good returns ratios. The fund managers have constructed quite a diverse portfolio of companies that include Tata Global Beverages (Starbucks), Titan Industries (jewellery, watches) and Ceat indicating their roles in consumption theme.
New Entrants Complete Exits Future Lifestyle Fashions Increase in Allocation