Lifestyle MFs down amidst good biz by sector

While consumer product companies are making good business with their stock prices reflecting a bullish trend, mutual funds (MFs) focused on the sector, however, have not been able to take much advantage of it.  Over four mutual funds that were launched exclusively to cash in on such themes have all underperformed their respective benchmarks.  These include funds which are dedicated FMCG as well. 

Currently, there are seven schemes that are focused on the consumption theme. They are: ICICI Prudential FMCG, Franklin FMCG Fund, Kotak Lifestyle Fund, Birla Sun Life GenNext Fund, HSBC Progressive Themes fund, UTI India Lifestyle Fund and Birla Sun Life Buy India Fund.

Progressive Themes Fund
HSBC Progressive Themes Fund, which was launched in February 2006 has disappointed the most with an yield return of 6 per cent, while its benchmark has posted 13.99 per cent returns since the fund’s inception. Similarly, UTI India Lifestyle Fund and Kotak Lifestyle Fund also have not been able to keep up with their benchmarks. The former, launched in August 2007, has posted NAV returns of 4 per cent while its benchmark showed 9 per cent returns since launch.  The latter, launched in March 2006, has yielded 6 per cent returns when its benchmark has given 11.34 per cent returns. Both these schemes are benchmarked against the CNX 500. Meanwhile, IDFC Mutual Fund has filed its draft offer document with Securities & Exchange Board of India to launch its open-ended ‘IDFC India Consumption Fund’, which is benchmarked against the BSE 200 Index and will invest 65 per cent in equity and 35 per cent in debt. The fund will invest in companies which benefit directly from rising income levels and associated domestic growth in India. IDFC Mutual Fund has a bouquet of 11 equity funds.  

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