India’s best-performing consumption-themed mutual fund bought these stocks

One of the biggest advantages of investing in the Indian stock market is believed to be an opportunity to get an exposure to the domestic consumption theme.

However, if we look at the performance of equity mutual funds over a long period: three years, five years and 10 years, consumption-focused thematic funds did not figure among the top three returns generator.

In fact, in the last three- and five-year terms, technology, small-cap and pharma sector funds have been the top performers.

But this has changed over the last one year as the market went through a new peak and then saw a correction.

Consumption thematic funds as a category generated nearly 10% returns over the last one year, beating all mutual fund categories barring credit-risk debt funds.

If we look within the category, ICICI Prudential Bharat Consumption Fund – Direct comprehensively outperformed its peers with twice the grow rate, mostly due to the breakout over the last two-three months.

Broadly, it has been overweight on mid-caps within the sector compared to the peers who have been more bullish on large and giant caps.

Interestingly, the fund was underweight on both consumer staples and consumer discretionary spaces within the consumer pack. It has been overweight on other consumer-facing businesses such as healthcare, automobiles and communication.

What it bought

Taking a peek at its portfolio construct and recent changes for the month ended June 30, the fund did not add any significant new stocks but bought additional shares of a bunch of them.

These include names like Bharti Airtel, Sun Pharma, Dr Reddy’s, Reliance Industries, Tata Motors DVR, and auto component maker Minda Industries.

What it sold

At the same time, the fund cut its stake in TVS Motor, ITC, Mahindra & Mahindra, Maruti Suzuki, Dabur and Hindustan Unilever.