Bank Of India MF’s consumption fund completes its 1styear In December 2025 – and it looks like it might be a strong 1st year judging from the fact that the fund is in top quartile over the last 6 months.
Stock picks in premiumization focused auto ancillaries space, in e-commerce platforms and select staples in confectionery and biscuits spaces contributed to the fund’s recent outperformance.
Consumption has become the market consensus theme, and some pockets are now looking like crowded trades. Valuations in some pockets are running ahead of fundamentals.
Segments that are direct beneficiaries of GST cuts are seeing visible growth signs. For others, Nitin would prefer to see more evidence of sustainable growth in either rural or urban segments before taking larger exposures.
Nitin has taken profits in some e-commerce platforms as valuations ran ahead of his comfort zone.
In recent months, he has been adding allocations to auto ancillaries and consumer staples. GST rationalization became a catalyst for further enhancement in allocations.
Allocations were reduced in the hospitals space – largely by switching out of the sector leader where valuations looked expensive and moving into a smaller player where Nitin believes value unlocking is still ahead.
Rural demand is where risk-reward seems favourable. Outside of this, select pockets including tobacco and liquor look attractive now.
Discretionary consumption is a strong structural story fuelled by rising disposable income and a young population. Cyclical ups and downs within this structural story is what gives agile fund managers opportunities to buy into and take profits nimbly to deliver value to investors. Nitin’s strategy is centered on around this thought.