BNP Paribas AMC is set to launch the BNP Paribas India Consumption Fund. The new fund offer (NFO) would be an open-ended consumption focused sector fund. The NFO will run from 17th to 31st August 2018. Since the fund is open-ended, it will reopen to investors five days after allotment.
The launch follows a gathering trend of consumption sector-focused fund launches by Indian AMCs. ICICI Mutual Fund had launched Bharat Consumption Fund series 1-4 this year.
In its presentation, the BNP Paribas Mutual Fund points out the following reasons to invest:
- India has a large population of 1.3 billion and an economy growing at 7.3%
- 65% of the population was born after 1980 and 41% of the population is working age (544 million people)
- Private consumption accounts for 59% of GDP
- Financial services, education, entertainment and leisure will drive consumption and Indians to move up the consumption value chain.
- Consumption is a ‘secular’ sector which grows regardless of market cycles. The sector is expensive on valuations but earnings growth is also strong.
The fund house also points to its strong ‘BMV’ or Business, Management, Valuations framework in selecting stocks based on these three factors.
The fund will invest 80-100% of its assets in consumption stocks and 0-20% in other types of companies or debt. It will also invest 0-10% in units of REITs and InVITs. The fund will be benchmarked to the Nifty 200 Total Returns Index (TRI). Karthikraj Lakshmanan and Abhijeet Dey will manage the equity portion and Mayank Prakash will manage the debt portion.
NFO Period: 17th August to 31st August
Minimum Investment: Rs 5000
Fund Managers: Karthikraj Lakshmanan, Abhijeet Dey, Mayank Prakash
Benchmark: Nifty 200 TRI
Auto, banks, cement, construction (real estate), consumer durables, consumer non-durables, fertilizers, finance, gas (consumer-oriented gas distribution), healthcare services, hotels, media & entertainment, retail pharmaceuticals, retailing, telecom services, textile products, textiles – cotton, textiles – synthetic and transportation.