10 Best FMCG Mutual Funds to Invest in India 2023
Fast-moving Consumer Goods (FMCG) mutual funds are a type of mutual funds that invest in companies which deal with products consumed by people on a daily basis. These goods are prepared and delivered in a short span of time for usage and consumption. Some of the popular FMCG products are packaged food, fruits and vegetables, milk, soap, etc. Here’s a list of top 10 best FMCG mutual funds in India that you can consider investing in. Read on!
10 Best FMCG Mutual Funds 2023
Here is the list of the top 10 best FMCG mutual funds 2023 in India:
| Name of FMCG Mutual Fund | Details* |
| ICICI Prudential FMCG Fund Direct Growth | AUM: ₹1156.49Cr Expense Ratio: 1.44% NAV: ₹423.24 |
| Nippon India Consumption Fund Direct Growth | AUM: 312.78Cr Expense Ratio: 1.76% NAV: ₹133.27 |
| SBI Consumption Opportunities Fund Direct Growth | AUM: ₹1185.92Cr Expense Ratio: 1.18% NAV: ₹222.19 |
| Canara Robeco Consumer Trends Fund Direct Growth | AUM: ₹935.37Cr Expense Ratio: 1% NAV: ₹75.60 |
| Mirae Asset Great Consumer Fund Direct Growth | AUM: ₹1989.06Cr Expense Ratio: 0.50% NAV: ₹65.56 |
| Aditya Birla Sun Life India GenNext Fund Direct Growth | AUM: ₹3217.57Cr Expense ratio: 1% NAV: ₹151.41 |
| Tata India Consumer Fund Direct Growth | AUM: ₹1346.60Cr Expense Ratio: 0.91% NAV: ₹29.32 |
| Sundaram Consumption Fund Direct Growth | AUM: ₹1106.68Cr Expense Ratio: 1.47% NAV: ₹63.55 |
| Baroda BNP Paribas India Consumption Fund Direct Growth | AUM:₹880.96Cr Expense Ratio: 0.81% NAV: ₹20.95 |
| UTI India Consumer Fund Direct Growth | AUM: ₹436.37Cr Expense Ratio: 1.77% NAV: ₹38.78 |
*Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
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Detailed Overview of Best FMCG Mutual Funds
Below is a detailed overview of the best FMCG mutual funds in India:
1. ICICI Prudential FMCG Fund Direct Growth
Considered as one of the best FMCG mutual funds, this equity sectoral fund was launched on March 31, 1999. The scheme seeks to generate long-term capital appreciation by investing predominantly in equity and related securities of FMCG companies. 90% of the corpus is invested in equities while the remaining is invested in debt or money market instruments.
- NAV: ₹423.24
- Expense Ratio: 1.44%
- AUM: ₹1156.49 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹5,000
- Annualised 3-Year Return: 24.10%
- Annualised 5-Year Return: 13.40%
2. Nippon India Consumption Fund Direct Growth
Probably the best FMCG mutual fund from Nippon Mutual Fund, this scheme was launched on June 30, 1995. The current fund manager of this fund is Sailesh Raj Bhan. This scheme aims towards earning long-term capital appreciation by investing at least 80% of net assets in equity related instruments.
- NAV: ₹133.27
- Expense Ratio: 1.76%
- AUM: ₹312.78 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹100
- Annualised 3-Year Return: 33.20%
- Annualised 5-Year Return: 14.50%
3. SBI Consumption Opportunities Fund Direct Growth
Considered as one of the best FMCG mutual funds, this scheme was launched on January 01 2013. It works towards offering investors opportunities of long-term capital appreciation. The fund manager invests in a diversified portfolio of equity and equity-related instruments. It is an open-ended type of mutual fund.
- NAV: ₹222.19
- Expense Ratio: 1.18%
- AUM:₹1185.92 Cr
- Category of Fund: Sectoral/ Thematic
- Risk: Very High
- Minimum Investment: ₹500
- Annualised 3-Year Return: 34.70%
- Annualised 5-Year Return: 12.80%
4. Canara Robeco Consumer Trends Fund Direct Growth
This mutual fund scheme was made available to investors for the first time on December 19, 1987. At present, the fund manager of Canara Robeco Consumer Trends Fund is Ravi Gopalakrishnan. The aim of this fund is to provide long-term capital appreciation to investors by investing in equity-related securities that benefit from growing consumer demand in India.
- NAV: ₹75.60
- Expense Ratio: 0.99%
- AUM: ₹935.37 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹1,000
- Annualised 3-Year Return: 27.50%
- Annualised 5-Year Return: 15.30%
5. Mirae Asset Great Consumer Fund Direct Growth
This fund seeks to capture growth from a large number of sectors that benefit either directly or indirectly from increased consumption in India. Therefore, the portfolio includes growth companies that have a strong return ratio and possess a sustainable competitive advantage.
- NAV: ₹65.56
- Expense Ratio: 0.50%
- AUM: ₹1989.06 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹1,000
- Annualised 3-Year Return: 28.70%
- Annualised 5-Year Return: 14.20%
6. Aditya Birla Sun Life India GenNext Fund Direct Growth
This mutual fund was launched for investors on January 01 2013. Its aim is to invest in equity-related instruments so as to benefit from an increasing consumption pattern fueled by the high disposable income of the young generation.
- NAV: ₹151.41
- Expense Ratio: 1%
- AUM: ₹3217.57 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹1,000
- Annualised 3-Year Return: 27.10%
- Annualised 5-Year Return: 13.40%
7. Tata India Consumer Fund Direct Growth
This type of fund invests around 80% of its net assets in equity-related instruments of companies that are consumption-oriented sectors in India. Investors who are willing to invest for the long term can earn capital appreciation. At present, Sonam Udasi is the fund manager.
- NAV: ₹29.32
- Expense Ratio: 0.91%
- AUM: ₹1346.60 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹150
- Annualised 3-Year Return: 23.20%
- Annualised 5-Year Return: 24.80%
8. Sundaram Consumption Fund Direct Growth
This fund has existed for 10 years. It invests the majority of the money in consumer staples, automobile, services, material sectors, and consumer discretionary. The top 5 holdings of this fund are Titan, Hindustan Unilever, ITC, Airtel and Maruti Suzuki.
- NAV: ₹63.55
- Expense Ratio: 1.47%
- AUM: ₹1106.68 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹100
- Annualised 3-Year Return: 24%
- Annualised 5-Year Return: 8.40%
9. Baroda BNP Paribas India Consumption Fund Direct Growth
This fund was made available to investors for the first time on September 07, 2018. Mayank Prakash, Abhijeet Dey and Karthikraj Lakshmanan are the fund managers at present. This scheme’s objective is to generate capital as well as provide long-term growth opportunities by investing in companies that cater to the increasing consumption needs of Indian customers.
- NAV: ₹20.95
- Expense Ratio: 0.81%
- AUM: ₹880.96 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹500
- Annualised 3-Year Return: 24%
- Annualised 5-Year Return: NA
10. UTI India Consumer Fund Direct Growth
This fund was launched on January 01, 2013. The aim of this scheme is to ensure long-term capital appreciation by predominantly investing in companies that are expected to benefit from consumers’ aspirations, increased consumption and demographics. It is an open-ended type of mutual fund.
- NAV: ₹38.78
- Expense Ratio: 1.77%
- AUM: ₹436.37 Cr
- Category of Fund: Sectoral/Thematic
- Risk: Very High
- Minimum Investment: ₹500
- Annualised 3-Year Return: 19.50%
- Annualised 5-Year Return: 8.40%
Benefits of Investing in FMCG Mutual Funds
Here’s a list of benefits of investing in FMCG funds:
1. Potential to Provide Substantial Returns
These equity-oriented funds can generate high returns on investment if one chooses the right sector. Generally, investors might consider investing in these funds for a prolonged period to obtain maximum benefits.
2. Helps with Portfolio Diversification
When choosing a particular market segment, one can invest in stocks of all companies and brands under it. Although investors might not get sectoral diversification, they can diversify in market capitalisation.
3. Potential to Achieve Long-term Financial Goals
The best FMCG mutual funds require a substantial period to reach their full potential. Thus, investors can achieve financial milestones by investing in these funds.
Who Should Invest in FMCG Mutual Funds?
Investors who have a high-risk appetite could invest in FMCG mutual funds. These funds have the potential to offer superior returns to investors. However, the chances of losses are equally high.
Moreover, these funds come with a long investment horizon. Sectoral mutual funds such as FMCG mutual funds take at least a few years to reach their potential. Hence, it is suitable for individuals who are planning to invest for the long term. The returns from this investment can be used for buying a house, saving for a child’s higher education, etc.
However, investors must take a plunge into these mutual funds only after doing thorough market research and assessing their financial objectives.
Features of FMCG Mutual Funds
- The FMCG sector in India is growing at a fast pace making it an ideal industry for investment. Investing in FMCG mutual funds can help an individual obtain higher returns than other instruments.
- Although these funds depend on market performance, they are less volatile than diversified equity funds. This is because there are few FMCG companies in India serving a huge population of India and contributing to the GDP growth along with the National Income. Therefore, FMCG mutual funds provide consistent returns against the growing volatility of markets.
- These funds are open-ended schemes available for SIPs (Systematic Investment Plans). Therefore, one can expect capital appreciation by investing in this instrument.
- FMCG mutual funds give the option of both dividend and growth. By investing in growth options, one can obtain a lump sum amount. Alternatively, the dividend option facilitates amounts to transfer to an investor’s account as and when the dividend is declared during the investment tenure.
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How to Invest in FMCG Mutual Funds?
One can invest in these funds either via online or offline mode. He/she can invest via online mode by following these steps:
- Step 1
Visit the portal of your preferred Asset Management Company (AMC) or the intermediary.
- Step 2
Register on their platform by filling in your details.
- Step 3
Complete the KYC formalities by uploading the relevant documents.
- Step 4
Go to the FMCG mutual fund scheme section and select the scheme in which you wish to invest.
- Step 5
Choose whether you want to go for the SIP or lump sum method.
- Step 6
Lastly, transfer the requisite funds from your bank account to invest in these funds.
You can also invest via offline mode by following these steps:
Step 1: Visit the branch office of AMC or the intermediary. Some fund houses also send their representatives to your home to complete the registration process.
Step 2: Complete the KYC formalities.
Step 3: Select the mutual fund scheme in which you wish to invest.
Step 4: Select the mode of investment, i.e., lump sum or SIP.
Step 5: The final step involves transferring funds from your bank account either through net banking or by providing a cheque.
Things to Consider Before Investing in the Best FMCG Mutual Funds
1. Investment Goal
FMCG mutual funds take at least a few years to develop or reach their peak. Thus, investors who plan to achieve long-term goals might want to consider this option.
2. Risk Appetite
These are equity-oriented mutual funds that invest in stocks of a single industry. There are chances of losses if the sector performs poorly. Investors might want to measure their risk-taking capacity before investing in these funds.
3. Expense Ratio
Fund houses charge a certain fee, known as expense ratio, for managing an investor’s fund. The amount is charged on his or her returns. Therefore, one should go for a plan that comes with a lower expense ratio.
4. Past Performance
One might want to evaluate a sector’s past performance under varied market conditions prior to investing. This will allow investors to estimate their future returns from the investment.
Taxation of FMCG Mutual Funds
As FMCG mutual funds invest in equity of FMCG companies, they are subject to taxation as per equity mutual funds. Gains or proceeds from these holdings are taxed as per the holding timeline. If the holding timeline is less than 12 months, they are subject to Short-term Capital Gains (STCG). The rate of taxation is 15% plus applicable surcharges.
On the other hand, if the holding period crosses the 12-month mark, gains are subject to Long-term Capital Gains (LTCG). The rate of taxation is 10% without indexation benefits. Moreover, LTCG gains of up to Rs.1 lakh are tax-exempted.
Final Word
As the FMCG sector is booming in India, investors planning to invest in stocks of these companies might expect decent returns in the long run. Nevertheless, knowing about the best FMCG mutual funds in India will guide them in making the right decision regarding investments and meeting financial goals effortlessly. Choose from this list of the best FMCG mutual funds 2023 and diversify your portfolio now!
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FAQs
The taxation on FMCG mutual funds is similar to that of other equity-based schemes. There are two types of taxes on equity funds based on the holding period. One has to pay Short Term Capital Gains Tax at the rate of 15% and 4% cess if the holding period is less than one year.
Alternatively, if one redeems units after a year, a Long Term Capital Gains Tax is levied at the rate of 10% with an additional cess of 4%. This is applicable for returns of over Rs. 1 lakh in a financial year.
The Fast Moving Consumer Goods (FMCG) sector is the 4th largest sector in the Indian economy. One of its chief characteristics is the high turnover of consumer packaged goods that are produced, distributed, marketed and consumed in a short span.
Some of the FMCG products that dominate the Indian market are cosmetics, detergents, tooth cleaning products, toiletries etc. Further, it includes other products such as soft drinks, packaged foods, chocolates etc.
FMCG Exchange Traded Fund (ETF) is an open-ended scheme that tracks the Nifty FMCG Index. The fund has been designed to monitor the behaviour and performance of FMCGs which are non-durable and mass consumption products available off the shelf. The Nifty FMCG index consists of 15 stocks from this sector listed on the National Stock Exchange (NSE).
FMCG funds come with substantial risks that might not suit all investors. Thus, individuals who possess at least 5 to 7 years of experience in mutual funds investment might consider investing in this fund. Investors with in-depth knowledge of FMCG sectors, their market influence and performance can consider this investment option.
Some of the government initiatives to promote the FMCG sector are:
The production-linked incentive (PLI) scheme in 10 key sectors (including electronics and white goods) was launched by the Union Cabinet on November 11 2020 to boost India’s manufacturing capabilities, exports etc.
100% FDI approval in the cash and carry segment and in single-brand retail along with 51% FDI in multi-brand retail by the Government of India.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
