Aditya Birla Sun Life India GenNext Fund: Fund Review

In the past 10-15 years, an investment theme which has attracted high attention is consumption. Easy availability of finance, a young population and a relatively stable and functioning democracy are a few key reasons why foreign and other strategic investors have been bullish on India. These three key factors have ensured sustained interest in companies who are players in the consumption theme.

The faith in these factors has paid off. In the past four quarters, consumer-focused companies have successfully met earnings estimates at a time when most companies in several key sectors of economy have failed to meet analyst targets. This shows consumer-focused companies are delivering a stable performance. In a year, which has events that can trigger off high volatility in the markets, investments in consumer-focused companies would be a sensible idea for retail investors. A case in point is the current general elections, whose outcome could change the direction of the markets for the next one year.

Given these factors, investors can consider Aditya Birla India GenNext Fund. It has a performance record of over a decade. Among consumption-focused schemes, the scheme has delivered better performance than its peers. In the past three-year and five-year periods, the scheme has given 15% and 18% returns while its peers have delivered returns of 14% and 15%, respectively over the same periods. Investors should stay invested in the scheme with at least a five-year horizon.


Portfolio change (past 6 months)

New entrants	Complete exits	Increase in allocation
Alkem Labs	L&T Finance Holdings	Eris Lifesciences
Axis Bank	Cadila Healthcare	PNB Housing Finance
Jubilant FoodWorks	ICICI Lombard Gen Insurance	MRF

Returns (in %)

Period	CAGR return	SIP CAGR return	Thematic fund -AVG CAGR
1 Year	4.34	11.09	0.66
3 Year	15.62	11.89	11.97
5 Year	18.67	14.51	13.87

Returns peer comparison (in %)

Scheme	1-year	3-year	5-year
Quant Consumption Fund	-4.61	14.29	16.50
Reliance Consumption Fund	-2.07	6.93	10.54
Sundaramm Rural & Consumption Fund	-3.29	15.35	18.33

source: Accord Fintech, complied by ETIG Database

Expert Take
Harshvardhan Roongta, CFP, Roongta Securities

I believe retail spending in unlikely to be impacted even during slowdown in the economy. Hence, schemes which have a large number of companies from consumption sector are likely to work as a ‘safe haven.’ This scheme has been a consistent outperformer and investors can consider allocating around 10% of their portfolio with a holding period of at least five years.