SBI FMCG Fund

The SBI FMCG Fund has been in the market for around 22 years showing growth each year. As consumer goods are always in demand, it acts as a favour to the consumption funds. The fund follows the bottom-up technique and consumption theme while picking equities for investment.

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Fund Brief

SBI FMCG Fund is the former name of the SBI Consumption Opportunities Fund. It is an open-ended fund that invests in equities in the consumption-oriented sector and other consumption-related instruments. The fund invests in stocks of companies that sell products directly to their consumers. 

The State Bank of India Mutual Fund House (SBIMF) offers the fund and has around INR 732.96 crores of assets under management (AUM) at present. It invests 80% of its fund in the consumption sector and the rest 20% in other minor sectors of money instruments.

The major shareholders of this fund are Page Industries Ltd, ITC Ltd, Bharti Airtel Ltd, Relaxo Footwears Ltd, and Emami Ltd.

Plans under SBI FMCG Fund are:

  • SBI FMCG Fund – Regular Plan
  • SBI FMCG Fund – Direct Plan

Different variants of plans under SBI FMCG fund are:

  • Growth option – Dividend earned is automatically reinvested resulting in compound returns
  • Income Distribution and Cash Withdrawal (IDCW) option – Dividend earned can be withdrawn if the investor selects

Further, it should be mentioned that the Regular Plan is for those investors who require a distributor/mediator for buying stocks with the fund. On the other hand, the Direct Plan is for those investors who don't need a distributor and directly buy stocks along with the fund. The absence of mediators ensures higher returns of up to 1.07% in the direct plan.

Fund Facts

Name of the fund

Previously known as SBI FMCG Fund

The present name is SBI Consumption Opportunities Fund.

Fund House

State Bank of India Mutual Fund House

Fund Type

Equity type with consumption theme

Open/close

Open-ended

Launch date

The regular plan – 14 July 1999

The direct plan – 1 Jan 2013

Benchmark 

Primary benchmark – Nifty India Consumption Index

Secondary benchmark – S&P BSE Sensex tri

Entry load

Nil

Exit load

0.10% exit load for exit within 30 days of allotment.

Exit load after 30 days of allotment is Nil.

Minimum investment

A lump sum of INR 5,000

Additional investment

INR 1,000

Risk factor

Very high risk

Lock-in period

No lock-in period

Investment Objective

The SBI FMCG Fund is a long-time investment plan that aims to increase its investor’s capital gain. The fund is now known as Consumption Opportunities Fund. It invests in the best opportunities of equities in the consumption market, including consumer durables, non-durables, textiles, entertainment, hotels, and travel services. 

As the demand for consumer goods never falls, the future of consumption-oriented funds is beneficial. For diversifying investments, the fund profoundly analyzes the trends and avoids allocating money to companies that may incur losses. Hedging is a marketing strategy to tackle or cut probable losses. 

SBIMF experts do their best to avoid risks to a greater extent as the equity market is never free of risks. Hence, there is no 100% assurance of meeting investment objectives. Investors must be aware of capital loss.

Fund Summary

  1. SBI FMCG Fund Regular plan

    • Risk – Very high
    • Expense ratio – 2.52% 
    • Net Asset Value (NAV) – INR 92.1917 (as of 18 June 2021)
    • Returns – 63.73% (1 year)
  2. SBI FMCG Fund Direct Plan

    • Risk – Very high
    • Expense ratio – 1.45%
    • Net Asset Value – INR 117.69 (as of 18 June 20, 2021)
    • Returns – 65.44% (1 year)

Fund Returns Summary

  1. Fund return summary table for the SBI FMCG Fund Regular Plan:

    Time

    Percentage return

    6 months

    21.84%

    1 year

    63.73%

    3 year

    9.32%

    5 year

    14.13%

  2. Fund return summary table for the SBI FMCG Fund Direct Plan:

    Time

    Percentage return

    6 months

    22.48%

    1 year

    65.44%

    3 year

    10.52%

    5 year

    15.35%

Pros and Cons 

Pros

Cons

Low expense ratio at 1.45%

The very high-risk factor involved.

The consumer goods market rarely faces a lag. Hence, the consumption funds profit.

The expense ratio for the regular plan is higher than the other consumption opportunities fund in the market.

Money doubled every 4-5 years

Average risk management

Repurchase available

Benefits of the SBI FMCG Fund

  • Long-run returns: As the fund has been in the market for a long time, it will remain so because it invests in only consumption opportunities. As consumption would never go down hence, the fund will continue profiting for a very long time. In turn, investors will receive promising returns over the invested period.
  • Potential growth: With the rising population, the demands for consumer goods are increasing, thereby expanding the market. It means the consumption theme funds have excellent growth potential, ensuring good returns.
  • Stability: Yes, the fund is high-risk. It is only under very unusual circumstances the market for consumer goods faces lag. Otherwise, the consumption market is one of the most stable markets, making this fund one of the best instruments to invest in.
  • Consistent performance: The fund has been in the market for 22 years, and it has an excellent performance in the money market. As a result, it has been able to generate good returns for investors. Hence, fulfilling the aim of long-term capital appreciation. 

Fund House Details

SBI FMCG Fund is managed by the State Bank of India Mutual Fund house. It is one of the oldest fund houses and has a vast experience of 30 years in the money market. Moreover, the State Bank of India is one of the largest banks of India and also one of the most trusted.

At SBIMF, experts devise fund plans keeping in mind the requirements of investors and the market trends. Their vision is to become the most trusted money managers. Keeping in view their track record, they have been successful in doing so. Before urging any investor, they aim at educating them about the mutual funds. It further helps maintain transparency between the investors and the fund house.

SBIMF is managed by two banks primarily:

  • State Bank of India – 63% holdings
  • AMUNDI France – 37% holdings

Who should invest in SBI FMCG Fund?

  • Investors who want long-term returns: This fund's objective is to help investors gain capital in the long run. Hence, this fund is ideal for any investor who wants to multiply their money over a long period.
  • Investors who understand the market: This is a smart plan for investors who understand how the entire market works. They would realize that though there are risks involved in the fund, the consumption market is still a safe place to invest. 
  • Investors with knowledge of equities: The equity market is all about fluctuations and the gains and profits due to them. Therefore, any investor looking to invest in an equity fund should have a basic knowledge of how the stock market functions.

Conclusion

To conclude, SBI FMCG Fund is an excellent opportunity for investors interested in the consumer markets and those willing to take a few risks. The fund return percentages are positive. It always crosses the benchmark set and successfully fulfils the aim of the investors. 

The fund house and the fund have already had a long run in the market, which helps in increasing the reliability factor. Therefore, if investors want to gain good and consistent returns on their money, they can choose this fund.

FAQ's

  • Q. What is FMCG?

    Ans: FMCG in the expanded form is 'fast-moving consumer goods.' They refer to the goods that the customers directly buy from the companies.
  • Q. What is NAV?

    Ans: NAV is the cost per share of the fund in the market on a particular day and determines the fund's performance.
  • Q. How is NAV calculated?

    Ans: NAV is calculated by the fund's total value in cash, minus any existing liabilities, and dividing them by the number of folios present in the fund.
  • Q. How to know if a fund is suitable?

    Ans: Before investing, an investor needs to identify their aims of investment. Then a discussion with a financial advisor is advised for deciding on a fund.
  • Q. How to subscribe to the SBI FMCG Fund?

    Ans: It can be done either online, through the official website of the fund house. Or offline by contacting a financial advisor at SBIMF.
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