Consumption fund NFOs: Invesco India, Motilal Oswal funds open for subscription, should you invest?

A major shift in investor attention is currently underway toward consumption funds. The core expectation is that the recent GST rationalisation will directly stimulate consumer demand, a momentum expected to flow through to companies as increased revenues, leading to a rise in their share prices and better portfolio performance. 

India’s expanding consumer economy has attracted fresh offerings from mutual fund houses, with Invesco Mutual Fund and Motilal Oswal Mutual Fund unveiling equity schemes dedicated to the consumption theme. Both fund houses are looking to capitalise on rising incomes, urbanisation, and shifting spending patterns, which are expected to drive India’s next phase of growth. 

Invesco India Consumption Fund

Invesco Mutual Fund has launched the Invesco India Consumption Fund, an open-ended scheme focused on companies poised to benefit from India’s consumption-driven growth. The New Fund Offer (NFO) opened recently and will close on October 17.

The fund will invest at least 80% of its net assets in equities and equity-linked instruments of companies within the consumption ecosystem. Managed by Manish Poddar and Amit Ganatra, the actively managed scheme will follow a blend of top-down and bottom-up strategies, targeting both structural and cyclical opportunities. Its performance will be benchmarked against the Nifty India Consumption TRI.

Manish Poddar, Fund Manager, noted that India’s demographic and policy landscape make consumption a compelling theme. “Rising incomes, urbanisation, and aspirational consumers, supported by reforms like GST 2.0, create an environment highly conducive for consumption-led growth. Our fund will focus on companies that remain relevant to India’s evolving consumer base,” he said.

Investment details include a minimum subscription of Rs 1,000 (and multiples of Rs 1), with SIPs starting from Rs 100 per day or Rs 500 per month. The scheme carries an exit load of 0.50% if redeemed within 3 months, and no exit load thereafter.

Motilal Oswal Consumption Fund

Similarly, Motilal Oswal Mutual Fund has announced the Motilal Oswal Consumption Fund, an open-ended equity scheme that will seek to capture India’s “multi-decade consumption growth story.” The NFO opens on October 1 and closes on October 15.

The scheme’s investment objective is to generate long-term capital appreciation by investing predominantly in equities of companies engaged in consumption-related activities. It will also be benchmarked against the Nifty India Consumption TRI.

Prateek Agrawal, MD & CEO of Motilal Oswal AMC, said the fund is designed to reflect India’s changing spending behaviour. “Consumption already contributes over 60% of GDP. What’s changing is the shift from essentials to discretionary categories, with consumers prioritising quality, brands, and experiences. This premiumisation will sustain long-term growth,” he noted.

The fund will be managed by a multi-manager team, including Niket Shah (CIO), Varun Sharma, Bhalchandra Shinde, Rakesh Shetty, and Sunil Sawant, covering equities, debt, and overseas components. It will focus on high-growth pockets such as organised retail, digital services, financial services, durables, and lifestyle products.

Outlook

Both schemes highlight the growing focus on India’s domestic consumption story, at a time when global economies face uncertainty. By offering investors exposure to evolving consumer behaviour, mutual funds are positioning themselves to capture one of the country’s strongest long-term structural themes.

Consumption funds at a glance

Over the past one year, consumption-based mutual funds have recorded an average decline of around 8.84%, with some schemes falling by as much as 19.11% during the period.

Top Funds – 1 Year

Rank    Fund Name    1 Yr Return (%)
1    Kotak Consumption Fund – Direct Plan    -1.19
2    HSBC Consumption Fund – Direct Plan    -2.87
3    Axis Consumption Fund – Direct Plan    -4.31
4    Kotak NIFTY India Consumption ETF    -4.46
5    ICICI Prudential Nifty India Consumption ETF    -4.56

All 1-year returns are negative, indicating a weak short-term performance for this thematic segment.

Top Funds – 3 Years

Rank    Fund Name    3 Yr CAGR (%)
1    Mirae Asset Great Consumer Fund – Direct Plan    18.52
2    Tata India Consumer Fund – Direct Plan    18.24
3    ICICI Prudential Bharat Consumption Fund – Direct Plan    18.02
4    Baroda BNP Paribas India Consumption Fund – Direct Plan    17.14
5    Mahindra Manulife Consumption Fund – Direct Plan    17.07

Top Funds – 5 Years

Rank    Fund Name    5 Yr CAGR (%)

1    SBI Consumption Opportunities Fund – Direct Plan    25.49
2    Nippon India Consumption Fund – Direct Plan    24.83
3    Mirae Asset Great Consumer Fund – Direct Plan    23.47
4    Canara Robeco Consumer Trends Fund – Direct Plan    22.36
5    ICICI Prudential Bharat Consumption Fund – Direct Plan    21.87

Source: Value Research

Over the 1-year period, returns have been broadly negative across the board. The top performers — Kotak Consumption Fund (–1.19%) and HSBC Consumption Fund (–2.87%) — still delivered losses, reflecting a challenging year for the consumption segment amid macroeconomic headwinds, inflationary pressures, and uneven demand recovery.

However, the 3-year performance table paints a different picture. Mirae Asset Great Consumer Fund leads with an impressive 18.52% CAGR, followed closely by Tata India Consumer Fund and ICICI Prudential Bharat Consumption Fund. These funds have benefited from structural consumption growth drivers, such as rising disposable incomes and premiumisation trends in India.

The 5-year data underscores the long-term strength of the theme. SBI Consumption Opportunities Fund tops the list with a 25.49% CAGR, followed by Nippon India and Mirae Asset funds, all delivering strong double-digit returns. This performance indicates that despite short-term volatility, the consumption theme has historically rewarded patient investors.