LIC Mutual Fund Launches New Consumption Fund to Capitalize on India's Growth Story

LIC Mutual Fund has introduced the 'LIC MF Consumption Fund', an open-ended equity scheme designed to leverage India's anticipated consumption boom. The New Fund Offer (NFO) will be open from October 31, 2025, to November 14, 2025, with the scheme reopening for transactions on November 25, 2025. Managed by Sumit Bhatnagar and Karan Doshi, the fund will benchmark against the Nifty India Consumption Total Return Index (TRI). Its core strategy involves allocating 80-100% of assets to companies expected to profit from rising domestic consumption, with flexibility to invest up to 20% outside this theme and across various market capitalisations.

This launch comes as India experiences significant economic momentum, a growing middle class, and a surge in luxury market spending that is extending beyond major cities. According to RK Jha, Managing Director & Chief Executive Officer of LIC Mutual Fund, the fund offers retail investors a prime opportunity to benefit from this consumption cycle, driven by factors like a healthy working-age population, rising per capita income, rapid urbanisation, and digitalisation.

The minimum investment during the NFO is ₹5,000. Yogesh Patil, Chief Investment Officer-Equity at LIC Mutual Fund, highlighted that India's consumption boom is expected to persist for a decade or more, supported by strong fundamentals and structural reforms.

Impact: This fund launch allows investors to directly participate in India's robust consumption growth narrative and the trend of premiumisation across various sectors. It channels investment into consumer-focused businesses, potentially boosting their valuations and market performance. Rating: 7/10

Difficult Terms: * **Open-ended equity scheme**: A type of mutual fund where an unlimited number of units are issued and redeemed. Investors can buy and sell units on any business day. 'Equity' signifies that the fund invests primarily in stocks. * **NFO (New Fund Offer)**: The initial period during which a newly launched mutual fund scheme is available for investors to subscribe to its units. * **Consumption theme**: An investment strategy focused on sectors and companies that benefit from increased consumer spending on goods and services. * **Equity and equity-related securities**: Financial instruments such as stocks (shares) and derivatives related to stocks. * **Market capitalisations**: The total market value of a company's outstanding shares. Companies are typically categorised as large-cap, mid-cap, or small-cap based on this value. * **Benchmarked**: The performance of an investment fund is measured and compared against a specific market index, known as its benchmark, to assess its relative success. * **Total Return Index (TRI)**: An index that measures the performance of its constituent securities, including both price changes and reinvested dividends. * **Premiumisation**: A consumer trend where individuals opt for higher-priced, more luxurious, or higher-quality products and services over standard or budget options. * **Discretionary spending**: Spending on non-essential goods and services, typically funded by income remaining after essential needs are met. * **Per capita income**: The average income earned per person in a country or region, calculated by dividing the total income by the total population. * **Urbanisation**: The process of population shift from rural to urban areas, leading to the growth of cities and towns. * **Digitalisation**: The process of adopting and integrating digital technology into various aspects of life and business, such as e-commerce and digital payments. * **SIP (Systematic Investment Plan)**: A method of investing a fixed amount of money at regular intervals (e.g., monthly) into a mutual fund scheme.