NFO Pick – (Invesco India Consumption Fund NFO)

22 Sep 2025 , 03:51 PM

WHY IS CONSUMPTION IN A SWEET SPOT?

Before investing in a consumption fund, let us look at why consumption as a theme is taking precedence. The recent tariffs imposed by Trump have strained exports and turned the focus back to domestic consumption. There are several broad trends. New-age consumers are redefining the market. Household spending patterns are being upgraded. Above all, access to products and services have improved substantially due to Omnichannel models.

What are the big drivers of this consumption theme? Firstly, there is the demographic dividends of a young consuming population with rising incomes. Secondly, much of the rise in per capita incomes is likely to translate into consumption over next few years. People are bigger discretionary spenders and are opting for premium products. Tier-2 and Tier-3 cities are growing exponentially. Above all, there is easy access to low-cost credit for consumers.

LOW RATES, LOW INFLATION, LOW GST, LOW BARRIERS

It is not often that you see the convergence of 4 factors that have combined to drive consumption in India.

• RBI has cut rates by 100 bps this year, and more cuts are likely. Low rates, combined with easy access to credit are a great fillip for the India consumption story.
• Inflation was always the big tax that Indians paid. With average inflation at under 2%, there is a big real income boost that will translate into consumption spending.
• After a gap of 8 years, there has been a quantum rationalization of GST rates with most items of consumption seeing a drastic cut in GST. This can be a force multiplier.
• Today, there are low barriers to credit access, low barriers to digital access, and low barriers to accessing the tier-2, tier-3, and even rural areas. That is a big advantage.

Let us now turn to how the India-specific consumption funds have performed over different time frames!

HOW CONSUMPTION FUNDS PERFORMED IN INDIA

Consumption Funds in India manage ₹40,619 Crore AUM across 20 funds. For our ranking, we have only considered top-10 funds with 5-year track record. Here are the top-10 consumption funds based on 5-year CAGR returns (Regular Plans).

Scheme Name	1-Year (%) Returns	3-Year (%) Returns	5-Year (%) Returns	Daily AUM (₹ in Crore)
SBI Consumption Opportunities Fund	-8.28	16.10	24.38	3,344.25
Nippon India Consumption Fund	-3.47	16.72	23.40	2,897.62
Mirae Asset Great Consumer Fund	-2.53	18.24	22.13	4,759.77
Canara Robeco Consumer Trends Fund	-3.64	16.16	21.22	1,985.81
Aditya Birla Sun Life Consumption Fund	-2.09	15.61	20.89	6,562.37
ICICI Prudential Bharat Consumption	-1.74	18.61	20.86	3,289.51
Tata India Consumer Fund	-3.24	18.45	20.61	2,631.52
Baroda BNP Paribas India Consumption	-3.43	16.48	20.38	1,583.75
Mahindra Manulife Consumption Fund	-4.29	16.69	20.26	555.66
Sundaram Consumption Fund	-1.71	16.76	19.71	1,652.24

Data Source: AMFI

Consumption Funds have generated average 1-year return of -3.44%, 3-year CAGR returns of 16.98%, and 5-year CAGR returns of 21.38%. The 5-year return may be tad inflated due to the COVID base. Return dispersion is low over longer time durations, but these funds have clearly outperformed the Nifty over longer time frames.

GLANCE AT INVESCO INDIA CONSUMPTION FUND NFO

Here are key details of the Invesco India Consumption Fund NFO.

• NFO opens on October 03, 2025 and closes on October 17, 2025. This open-ended Fund will invest in a portfolio of equities that benefit from the India consumption theme.
• On the risk-o-meter, Invesco India Consumption Fund is classified as “High Risk,” due to its substantial exposure to equity and the underlying risks of a thematic bias.
• Invesco India Consumption Fund NFO is best suited to investors looking at long term wealth, via a theme that is defensive, yet, synonymous with growth of Indian economy.
• The benchmark for the fund will be the Nifty India Consumption TRI. Manish Poddar and Amit Ganatra will be the designated fund managers for this fund.
• Minimum application amount in NFO is ₹1,000 and in multiples of ₹1 thereof. Minimum SIP outlay will range from ₹100 for daily SIPs to ₹1,500 for Quarterly SIPs.
• There is an exit load of 0.50% of redemption value if redeemed within 3 Months of date of allotment. There is no exit load after that. Inter-plan transfers do not attract exit load.

Invesco India Consumption Fund will be classified as an equity fund for tax purposes. Short term capital gains (STCG) will be taxed at 20.8% (including cess). Long term capital gains (LTCG) will be taxed at 15%, after a base tax-free LTCG limit of ₹1.25 Lakhs per fiscal year.