Mirae Asset Great Consumer Fund Regular Growth Invest Now

Mirae Asset Great Consumer Fund is an open-ended fund of funds which is based on the consumption theme. The fund seeks to invest in companies which can be directly or indirectly positively impacted by Indian ‘consumption-led’ demand.

When investing specifically in the Mirae asset consumer fund (Regular Plan Growth), it is important to understand the fund’s approach, risk, investment horizon and strategy.

What Is Mirae Asset Great Consumer Fund?

Mirae Asset Great Consumer Fund is a sectoral (thematic) open-ended equity mutual fund which is investing as per the consumption theme. The scheme was allotted on March 29, 2011 and based on the “Nifty India Consumption Index (TRI)”. Mirae Asset says that the fund aims to invest in companies, which are directly or indirectly benefiting from consumption-led demand in India.

Understanding the Consumption Theme

Consumption is a more than just purchasing of household goods. A broad spectrum of economic activity is included.

The underlying principle of Mirae asset consumer fund.  

How the Fund Seeks to Benefit From Consumer Growth

The fund aims to have a “high-concentrated portfolio” of around 30-40 stocks in various sectors including FMCG, automobiles, realty, healthcare, e-commerce, media and entertainment, telecom, banking and financial services, education, transportation and tourism and hospitality, Mirae Asset says.

That’s the reason that the fund is different from a specific FMCG fund.

Likewise, there are opportunities for the telecom, technology-enabled businesses, financial services and e-commerce companies thanks to the increased use of digital consumption.

This takes the “big picture” view, which enables the fund to join in various aspects of India’s consumption chain.

Key Features of Mirae Asset Great Consumer Fund

There are various characteristics that make the fund worthwhile to comprehend before investing in it.

Fund Type and Investment Approach

The scheme is an open-ended equity scheme which is based on consumption theme. It employs a simple bottom up investment strategy to look for companies that can grow, have good return ratios and a sustainable competitive advantage.

Benchmark and Investment Horizon

The Mirae Asset Great Consumer Fund has the Nifty India Consumption Index (TRI) as its benchmark. Currently Mirae Asset recommends an investment term of 5 years or more.

The equity markets have the potential of making big jumps in shorter intervals of time. A consumption theme can also have a down period of some industries or segments of consumers. The longer time frame provides investors with more time in which they can go through various market cycles.

Fund Manager

According to Mirae Asset’s scheme information dated 18 August 2019, Mr. Siddhant Chhabria manages the fund.

The role of a fund manager is crucial as the thematic investing involves a number of choices as to which companies, industries and market capitalizations have good prospects.

Benefits of Mirae Asset Great Consumer Fund

Exposure to India’s Consumption Story

For instance, its concentrated focus on the consumption theme in India is the best part about it.

As India’s disposable income (and urban population) increases and lifestyles are changing, and the consumer base is growing, there may be potential for businesses that cater to this group of consumers to expand.

But investors need to be aware that a good economic theme isn’t necessarily accompanied by good investment returns.

Professional Fund Management

The scheme is actively managed, and employs fundamental research in stock selection.

This can be helpful for investors that don’t wish to conduct their own due diligence on the consumer-related enterprises.

Flexibility Across Market Capitalizations

An investment opportunity set is expanded by the ability to invest in the various market-cap segments.

The Portfolio is not limited in size, and can go anywhere the Investment Team thinks it has value within the consumption theme.

Risks to Consider Before Investing

When it comes to investing, there’s no story of significant investment without the risks.

Thematic and Concentration Risk

The Mirae Asset Great Consumer Fund is a fund that indicates a certain consumption theme. So it can’t be considered due to its diversification to be as broad as a diversified equity fund that doesn’t have a thematic focus.

The fund may be under pressure if the sectors related to consumption slow down for an extended period of time.

It may also have a greater impact from the individual stock or sector moves due to its concentrated portfolio approach.

Equity Market Risk

The fund’s investment focus is on equity and equity related investments. The value of equity shares may fluctuate.

A variety of factors can cause share prices to drop, including subpar earnings, a slowdown in the economy, interest-rate fluctuations, geopolitical events, investor sentiment or anything else that could not have been predicted.

This isn’t a low risk investment of short term money, then!

Valuation and Economic Risks

A company that is good doesn’t always make a good investment at any price.

Once an investor puts in very high valuation on the consumer business, then returns may not keep pace with the expectations of future growth as reflected in the valuation.

Other factors that can impact consumption businesses include inflation, interest rates, employment, the demand in rural areas, and economic growth and spending in urban areas.

Regular Plan Growth vs Direct Plan Growth

The Regular Plan and the Direct Plan are the same scheme, but have different costs.

The Regular Plan generally will contain distributor costs while the Direct Plan is designed for investors who invest with the help of the Distributor.

Investors need to always look at the plan and the expenses involved in a comparison of returns, so they can’t compare just the past two years.

The factsheet of the Mirae asset consumer fund’s specifically mentions that the performance figures mentioned with respect to the data are for Regular Plan Growth and that each of the different plans under the scheme has different expense structure.

This will vary based on investment style, the services you need and the type of investment strategy you take.

Things to Check Before Investing for Mirae Asset Great Consumer Fund

If you’re considering investing in the Mirae asset consumer fund, you should ask yourself some questions:

• Can a “consumption” investment complement your current investment strategy?
• Are you able to hold on to the investment for 5 years or more?
• Are you okay with taking the risk of equity markets?
• Can you accept shortfalls in performance that is, not reaching the benchmark?
• Do you invest for a long-term time frame or short-term?
• Have you done a comparison of the expense structure of the Regular and Direct Plan?
• Do the fund’s equity holdings fit into the mix of your current holdings?

Conclusion

Mirae Asset Great Consumer Fund enables the investors to invest in the consumption theme in India in a focused manner in a professionally managed equity portfolio.

The long-term part of investors’ thinking is important when they are thinking about the Mirae asset consumer fund in the Regular Plan Growth option.

FAQs

1. What is Mirae Asset Great Consumer Fund?

Ans) Mirae Asset Great Consumer Fund is an open-ended equity fund, built around the India consumption theme which invests in the consumption related businesses.

2. What is the investment horizon for Mirae Asset Great Consumer Fund?

Ans) Basis on the consumption perspective, Mirae Asset suggests to invest in this stock for a period of 5 years or more.

3. Is Mirae Asset Great Consumer Fund suitable for SIP investment?

Ans) Investors who have long time horizon can consider SIPs to invest in a systematic manner, and with a control on volatility.

4. What is the benchmark of Mirae Asset Great Consumer Fund?

Ans) The fund has the Nifty India Consumption Index (TRI) as its benchmark.

5. What is the difference between the Regular and Direct Plan?

Ans) Both plans are part of the same plan, but have different fee structures and distribution. It is important for investors to do their homework before selecting a plan, by comparing costs.