BNP Paribas Mutual Fund joins the consumption-theme party

Volatility, trade wars, rich valuations and elections in less than a year make fund managers believe consumption is one structural story that investors can ride on. The Nifty India Consumption Index is among the best performers, giving an 18.70% return in the past one year.

After ICICI Prudential Mutual Funds’ closed-end Bharat Consumption Fund Series 1-4, the latest to enter the consumption space through an open-end fund is the BNP Paribas India Consumption Fund. Offered at Rs 10 per unit, the new fund offer (NFO) will be open August 17-31.

The fund will invest in companies across market capitalisations that follow the business to consumer model, have a strong competitive advantage and high earnings visibility over the long run.


Even though some stocks are expensive on valuation, the fund manager believes that consumption being a secular theme, it will grow regardless of market cycles and earnings growth is likely to remain strong.

The fund manager will invest in secular growth stories aided by rising aspirations, high income levels, high working-age population, digital influence, financialisation, policy reforms and urbanisation to name a few. Given the thematic nature of this fund, wealth managers believe this is not a fund for firsttime investors, but for investors who understand the risks associated with thematic funds.

“Investors can make a small tactical allocation to such themes with a medium-term view. For their longterm portfolio, diversified equity mutual funds which can invest across the spectrum will continue to be the best bet,” said Amol Joshi, founder, Plan Rupee.