ITI Bharat Consumption Fund - Direct (G): NFO Details

resr 5paisa Research Team

Last Updated: 29th January 2025 - 05:05 pm

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The ITI Bharat Consumption Fund - Direct (G) is an open-ended equity scheme launched by ITI Mutual Fund, focusing on India's consumption-driven sectors. The fund aims to generate long-term capital appreciation by investing primarily in equity and equity-related securities of companies engaged in consumption and related activities or allied sectors. This thematic fund is designed for investors seeking exposure to India's growing domestic consumption market, offering potential for capital appreciation by leveraging the country's consumption-driven economy.

Details of the NFO: ITI Bharat Consumption Fund - Direct (G)

NFO Details Description
Fund Name ITI Bharat Consumption Fund - Direct (G) 
Fund Type Open Ended
Category Thematic Fund
NFO Open Date 06-February-2025
NFO End Date 20-February-2025
Minimum Investment Amt ₹5,000/-  and in multiples of ₹1 thereafter
Entry Load -Nil-
Exit  Load

0.50% if redeemed or switched out on or before completion of 3 months from the date of allotment of units

Nil, if redeemed or switched out after completion of 3 months from the date of allotment of units.

Fund Manager Mr. Rohan Korde
Benchmark Nifty India Consumption (TRI)

Investment Objective and Strategy

Objective:

To generate long-term capital appreciation by investing primarily in Equity and Equity related securities of companies engaged in consumption and consumption related activities or allied sectors.

However, there can be no assurance that the investment objective of the scheme would be achieved.

Investment Strategy:

The ITI Bharat Consumption Fund - Direct (G) employs a thematic investment strategy centered on India's consumption-driven sectors. The fund seeks to generate long-term capital appreciation by investing primarily in equity and equity-related securities of companies engaged in consumption and related activities or allied sectors. 

To achieve this objective, the fund adopts a bottom-up stock selection approach, focusing on identifying individual stocks based on their growth potential within the consumption sector. This involves analyzing companies across various industries poised to benefit from the increasing domestic demand for goods and services.

Additionally, the fund remains attentive to emerging trends and new opportunities within the consumption space to maximize returns. This proactive approach ensures that the portfolio is well-positioned to leverage the evolving dynamics of India's consumption-driven economy. 

Overall, the ITI Bharat Consumption Fund - Direct (G)'s investment strategy is designed to provide investors with exposure to the expanding domestic consumption market, aiming for capital appreciation through a diversified equity portfolio focused on consumption sectors.

Why Invest in ITI Bharat Consumption Fund - Direct (G)?

Investing in the ITI Bharat Consumption Fund - Direct (G) - Direct Plan (Growth) offers several potential advantages:

1. Exposure to India's Consumption Growth: The fund focuses on companies poised to benefit from India's expanding domestic consumption. As the country's middle class grows and disposable incomes rise, sectors like consumer durables, FMCG, automobiles, and retail are expected to see significant growth. This fund provides targeted exposure to these opportunities. 

2. Thematic Investment Strategy: By adopting a thematic approach centered on consumption, the fund aims to capitalize on long-term structural trends in the Indian economy. This strategy allows investors to align their portfolios with specific growth drivers, potentially enhancing returns. 

3. Experienced Fund Management: The fund is managed by seasoned professionals, including Mr. Dhimant Shah and Mr. Rohan Korde, who bring extensive experience in equity markets and sectoral analysis. Their expertise is instrumental in identifying and capitalizing on investment opportunities within the consumption theme. 

4. Diversification Across Consumption Sectors: The fund invests across a broad spectrum of industries linked to consumption, such as automobiles, consumer durables, FMCG, pharmaceuticals, telecommunications, utilities, retail, housing, and travel. This diversification helps mitigate sector-specific risks while capturing the overall growth in consumption. 

5. Potential for Long-Term Capital Appreciation: With its focus on equity and equity-related securities of companies engaged in consumption and allied sectors, the fund aims to generate long-term capital appreciation, making it suitable for investors with a long-term investment horizon. 

6. Cost Efficiency: Opting for the Direct Plan (Growth) ensures that investors incur lower expense ratios compared to regular plans, as it eliminates distributor commissions. Over time, this cost efficiency can contribute to higher net returns.

Strength and Risks – ITI Bharat Consumption Fund - Direct (G)

Strengths:

The ITI Bharat Consumption Fund - Direct (G) presents several strengths that may appeal to investors:

1. Focused Investment Strategy: The fund is dedicated to investing in companies engaged in consumption and related activities, aiming to capitalize on India's growing domestic demand. This targeted approach seeks to leverage the anticipated expansion in consumption-driven sectors. 

2. Experienced Fund Management: Managed by seasoned professionals, including Mr. Dhimant Shah and Mr. Rohan Korde, the fund benefits from their extensive experience in equity markets and sectoral analysis. Their expertise is instrumental in identifying and capitalizing on investment opportunities within the consumption theme. 

3. Diversification Across Consumption Sectors: The fund invests across a broad spectrum of industries linked to consumption, such as automobiles, consumer durables, FMCG, pharmaceuticals, telecommunications, utilities, retail, housing, and travel. This diversification helps mitigate sector-specific risks while capturing the overall growth in consumption. 

4. Potential for Long-Term Capital Appreciation: With its focus on equity and equity-related securities of companies engaged in consumption and allied sectors, the fund aims to generate long-term capital appreciation, making it suitable for investors with a long-term investment horizon. 

These strengths position the ITI Bharat Consumption Fund - Direct (G) as a compelling option for investors seeking exposure to India's consumption-driven growth story.

Risks:

Investing in the ITI Bharat Consumption Fund - Direct (G) entails several risks that potential investors should carefully consider:

1. Market Risk: The fund invests primarily in equity and equity-related securities, making it susceptible to market volatility. Fluctuations in stock prices due to economic developments, political events, or company-specific factors can impact the fund's Net Asset Value (NAV). 

2. Thematic Concentration Risk: As a thematic fund focusing on consumption and related sectors, the fund's performance is closely tied to the consumption industry's fortunes. Any downturn or adverse developments in this sector could significantly affect the fund's returns. 

3. Liquidity Risk: Investments in certain companies, especially those with lower market capitalization, may face liquidity constraints. This could pose challenges in executing timely buy or sell orders, potentially affecting the fund's performance. 

4. Economic and Political Risks: Changes in government policies, economic reforms, tax regulations, or political instability can influence market conditions and, consequently, the fund's investments. Such macroeconomic factors can lead to increased volatility and impact returns. 

5. Interest Rate Risk: While primarily an equity fund, any exposure to debt instruments makes it sensitive to interest rate fluctuations. Rising interest rates can lead to a decline in bond prices, affecting the fund's overall value. 

6. Regulatory Risk: Changes in regulations governing mutual funds or the sectors in which the fund invests can impact its operations and profitability. Compliance with new regulatory requirements may also affect the fund's performance. 

Given these risks, the fund is classified under the "Very High" risk category. It's essential for investors to align their risk tolerance and investment horizon with the fund's objectives. A thorough review of the Scheme Information Document (SID) and consultation with a financial advisor are recommended before making investment decisions.

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