Over the last couple of years, there’s one investment theme that’s been quietly catching our eye – Consumption Funds. These are funds that simply invest in businesses we deal with every day: FMCG brands, cars, travel, food services, home appliances… basically, the things India’s middle class is spending more and more on.
Now, here’s why we’re particularly bullish. India crossed the $2000 per capita income mark in 2024. It may not sound like much, but it’s a big deal. Globally, countries that hit this level have seen consumer spending explode – not just on needs, but also on wants (holidays, better cars, lifestyle upgrades, the works).
Has the sector done well recently? Honestly, no. But that doesn’t worry us too much. Big themes take time. The exciting part is the setup we’re seeing now:
- RBI has cut interest rates → easier loans, more buying power.
- Government benefit schemes → more money in rural pockets.
- 8th Pay Commission (likely announcement soon) → salary hikes for millions.
- Possible GST relief → goods become more affordable.
Put all of this together, and it looks like India’s consumption engine is revving up.
From our side, we see this as an opportunity. If you already own a Consumption Fund, don’t be disheartened by short-term performance. And if you’re considering fresh investments, this theme could well surprise us all in the next few years.
Because at the end of the day, one thing is certain – Indians love to spend when they have extra money. And now, more and more of us do.
A Small Video on this
