Tata Mutual Fund has launched India’s first multi-cap consumption index fund, targeting diversified exposure across large, mid, and small-cap stocks in the booming consumption sector. The Tata BSE Multicap Consumption 50:30:20 Index Fund, an open-ended scheme, tracks the BSE Multicap Consumption 50:30:20 Index (TRI). Its NFO runs from December 9 to 23, with a minimum investment of Rs 5,000.
The fund provides in-built diversification, wide sectoral exposure, and access to emerging “new-age” consumer themes. It is designed for investors looking for long-term capital appreciation, with returns broadly aligned to the BSE Multicap Consumption 50:30:20 Index (TRI), subject to tracking error.
India’s consumption story drives over 60% of GDP, shifting from basics to aspirational spending on quick commerce, travel, and digital entertainment. Traditional indices favor large-cap FMCG and autos, overlooking mid- and small-cap growth. This fund’s 50% large-cap, 30% mid-cap, 20% small-cap split balances stability with high-potential plays, selecting 100 BSE 500 companies by six-month market cap in consumer discretionary and FMCG.
Managed by Nitin Bharat Sharma and Rakesh Prajapati, it offers no entry load but a 0.25% exit load within 15 days. “Consumption is a long-term structural theme for India. But its nature is shifting from basic needs to lifestyle and aspirational spending. Where the rich spend today, the middle class will spend tomorrow. While large caps offer stability and brand leadership, true wealth creation often lies in mid- and small-caps, which represent emerging consumption themes like quick commerce, travel, and digital entertainment,” said Anand Vardarajan, Chief Business Officer, Tata Asset Management.
“The 50:30:20 construct – 50% large caps, 30% mid caps, 20% small caps — aims to offer a transparent, rule-based way to participate in the consumption ecosystem without the concentration risks seen in traditional sector funds,” he added.
Why consumption funds shine long term
Consumption funds invest in companies fueled by rising incomes, urbanization, and a swelling middle class, boosting stock values and NAV. Short-term volatility persists, most posted marginal losses last month amid high valuations, but longer horizons reveal strength.
Period Top Performer (Direct Plan) Return (%)
1 Month Kotak Consumption Fund -0.10
Baroda BNP Paribas India Consumption -0.29
Bank of India Consumption -0.35
6 Months Kotak Consumption Fund 10.05
Kotak NIFTY India Consumption ETF 7.11
ICICI Prudential Nifty India Consumption 7.08
1 Year Kotak Consumption Fund 8.76
Kotak NIFTY India Consumption ETF 6.99
ICICI Prudential Nifty India Consumption 6.89
3 Years Tata India Consumer Fund 19.05
Mirae Asset Great Consumer Fund 17.61
Baroda BNP Paribas India Consumption 17.19
5 Years Nippon India Consumption Fund 20.88
SBI Consumption Opportunities Fund 20.85
Mirae Asset Great Consumer Fund 20.00
Actively managed funds, such as Nippon India and SBI, deliver 20%+ annualized returns over five years, outpacing ETFs through smart investments in retail, autos, and services. They weather cycles via diversification, though with higher volatility. ETFs suit cost-conscious investors chasing benchmarks.
This launch sharpens focus on “new age” consumption, ideal for long-term capital appreciation seekers tolerant of swings. Tata’s fund fills a gap, blending transparency, broad coverage, and multi-cap dynamism in India’s consumption powerhouse.
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