Overview of SBI Consumption Opportunities Fund
A thematic mutual fund is a Mutual Fund Scheme that invests in sectors or companies identified to have the theme associated with future consumption growth. SBI Consumption Opportunities Fund is an open-ended equity scheme that was launched on January 1, 2013, and has come to appeal to a large group of investors as they can invest to benefit from consumer-led growth in the Indian economy. It mainly grows the equity and products that have exposure to the companies that are directly related to consumption, products, retailing and services.
As such, any new and experienced investor looking for long-term capital appreciation should consider this fund as a worthwhile investment vehicle to back.
In this article, you will see how this fund has performed at different intervals. Moreover, it will help you decide whether this scheme will work for you or not. Let’s begin the analysis.
Primary Characteristics of the SBI Consumption Opportunities Fund
Here are some major key features of investing in this fund:
Investment Objective
The primary investment objective of the SBI Consumption Opportunities Mutual Fund is to achieve long-term capital by investing a minimum of 80% of its total assets in equity as well as equity-linked assets of Consumption Economy Companies which would have the domestic consumption theme of the country as their focus. These sectors include fast-moving consumer goods (FMCG), retail, automobile, pharma, media, and entertainment industries among others. The fund has invested in companies that serve India’s increasing consumption trend thus providing investors with an opportunity to reap from the benefit of India’s burgeoning middle class, urbanization and high disposable income.
Performance Analysis
This shows the performance history of such a fund, which allows investors to experience higher rates of returns in the long run. As of now, the fund has delivered the following returns:
- 1-Year Return: 44. 59%
- 3-Year Return: 28. 82%
- 5-Year Return: 6%
- Since Launch (2013): 58%
The following data indicates the same and proves the competency of the fund and its ability to beat its benchmark which is the Nifty India Consumption Total Return Index. This makes it attractive for those who wish to take a position on India’s consumption story, especially in sectors that are expected to grow steadily.
Expense Ratio
For mutual fund investors one of the measures that can be of essence is the expense ratio which refers to the amount that is charged for the management of the fund. The SBI Consumption Opportunities Fund has an expense ratio of 2 which is slightly on the higher end when compared with other large-cap index funds. , the costs are 7% higher than the average of the category with Rs.186,44 for the regular plan. However this cost appears slightly higher, the good performance and active management of this fund are helpful to investors who wish to be assisted by professionals in making the right investment decisions.
Fund Size
Depending upon the analysis the fund’s Assets Under Management (AUM) stood at almost ₹2,026 as of April 2024. 18 crore. This is in line with the growth of the fund and Investor confidence in it to offer good returns on their investments. A higher amount of AUM implies confidence from investors and stability and these would mean the fund has been able to meet its set goals and objectives in past years.
Minimum Investment
The fund also has low minimum investment limits meaning that it is an open fund for any investors. It has a minimum investment of ₹5000 lump sum investment, which means an investor can invest at least ₹5000, or a Systematic Investment Plan at ₹500 or above. This flexibility appeals even to small investors as it gives the investors an opportunity to invest in the fund systematically and enjoy the advantage of rupee cost averaging.
Exit Load
As for the fund, the first 0. Load of 1 percent if the units are redeemed within 30 days from the date of their purchase. This cuts along the lean of long-term investment and hinders short-term speculative trading which is actually in the interest of the fund’s long-term capital appreciation.
Considerations Before Investing in SBI Consumption Opportunities Fund
The following points should be understood before adding this fund to your portfolio:
Market Risks
As you would expect from any equity fund, the SBI Consumption Opportunities Fund is accompanied by market risks. One of the most important things that Investors should understand is that volatility is typical for such a fund and it fluctuates in the short term from time to time. Thus, it is important to have a long time horizon with such investment in the funds type.
Investment Horizon
Therefore, this fund is appropriate for long-term competition since the investor should be ready to commit at least five to ten years with the fund. Other investment opportunities may be preferred in case you have short-term needs for the money or in cases where you wish to have access to your money in the shortest time possible.
Tax Implications
One should note the repercussions of the taxes that they will be slapped with in the future or the gains that they will make in the future. Gains arising out of units sold before one year are levied at 15% while those from units sold after more than one year and up to ₹ 1 lakh in a year are charged at 10%. Tax planning is crucial in order to optimize the amount of money you get to keep.
Summary
In short, if you are someone looking for something different from traditional funds, it is your best option. Moreover, plan your investments for at least 7 years or more via SIP to streamline your portfolio.
