UTI India Consumer Fund delivered a top quartile 1 yr performance with a 5% return in a category that averaged around 2% in what has been a difficult year for the theme.
Sharp focus on excellent executors as an important stockpicking filter has been a key driver of fund performance says Vicky. In many segments within consumption, the addressable market is huge – winners are those who can execute growth plans better than others.
He is overweight autos and will likely remain so in the near term as sales momentum continues to be strong across the segment – albeit with some parts doing better than others. SUVs within passenger cars and scooters within 2 wheelers are growing faster in their respective segments.
He is underweight FMCG as the big brand owning FMCG players are steadily losing ground in a hugely disruptive distribution landscape. He says the retailers brand is becoming more valuable than the product’s brand – a seismic shift that is upending profit pools in the consumer space.
Acknowledging that many established retailers are now quoting at optically high PE multiples, he argues that as long as there is strong visibility of earnings growth momentum, many of them continue to look attractive as the entire shift from unorganized to organized is creating a market opportunity that is significantly larger than what we are seeing today.