The short term market has been quite bearish lately. The Nifty 50 has delivered negative 5% returns in the last year.When markets behave like this, chasing momentum funds is basically a waste of money. I’ve been analyzing the broader picture, and there are some genuinely good opportunities hiding in plain sight.
Current Market Scenario: Finding Opportunity in Correction
The Nifty FMCG index is trading at around ₹54,800 today, representing a steep 1718% correction from its peak. Now, most retail investors look at this & panic, thinking “FMCG is collapsing!” But seasoned investors? We see massive discounts on quality businesses.
What makes this even more attractive is that the government has already implemented GST rate cuts, and we’re witnessing interest rate cuts across the economy. This combination means consumption sector companies will start showing improved earnings in the upcoming quarters.
Start with Index Funds: Low Cost, High Impact
Nifty FMCG Index Fund : My Top Pick
This is where I’d put my money first. FMCG index funds are currently trading at significant discounts, giving you exposure to bluechip companies like Hindustan Unilever, ITC, and Nestle India at attractive valuations.
The beauty of these funds lies in their expense ratios, typically between 0.10% to 0.25%, which is fantastic for long-term wealth creation. Sure, the sector has been hammered with -16.3% returns last year, but that’s exactly why the opportunity exists today.
These companies have defensive characteristics that provide stability during market turbulence while still participating in India’s consumption growth story. When economic conditions improve, FMCG stocks are usually among the first to recover.
Nifty Consumption Index Fund : Broader Exposure
This fund gives you exposure beyond just FMCG it includes automobiles, consumer durables, retail, basically everything tied to India’s consumption theme. The Nifty India Consumption index includes 30 stocks compared to FMCG’s 15, offering better diversification.
Historically, this index has outperformed many broader indices during economic recoveries. With recent policy tailwinds like GST cuts and improving interest rate environment, this sector is well positioned for a strong comeback.
For Active Management Lovers: Professional Fund Management
If you prefer having experienced fund managers actively managing your portfolio, here are two value funds that have consistently delivered:
Axis Value Fund Direct Plan Growth
This fund has been a consistent performer with 24.52% CAGR over 3 years. The expense ratio is reasonable at 0.80%, and Nitin Arora has been doing excellent work as fund manager.
The fund manages ₹1,021 crores in AUM, showing good investor confidence without becoming too large to manage effectively. With a risk ratios(beta, standard deviation, sharpe ratio, treynor ratio) below its category average is a good sign for a mutual fund.
HSBC Value Fund Direct Plan Growth
This one’s been through a rough patch with 3.18% returns in the last year, but don’t let short-term performance fool you. The long term track record speaks volumes 28.21% CAGR over 5 years is absolutely phenomenal, while 3 year returns of 23.70% remain very solid.
The expense ratio of 0.76% is competitive, and with ₹13,532 crores in AUM. Sometimes the best opportunities come when quality funds are temporarily underperforming.
Final Thoughts
Also invest in these funds only if your investment horizon is more than 3 to 5 years. Then only it will give fruitful results. As this article is written on 26th september & market is falling, so it would be best to wait for few more days to let market correct & then start investing once the dust settles. Remember, the best returns often come to those who buy when everyone else is selling.
It’s usually right to start by investing about 25% of your intended amount initially. Once you see the market or fund showing signs of recovery, you can add more gradually, averaging your cost. Then, as confidence builds and the trend strengthens, deploy the remaining investment. This phased approach helps manage risk and take advantage of market rallies.
Just ensure you have the stomach for some short-term volatility before the inevitable recovery begins. Historical data shows these sectors tend to reward patient investors handsomely.
Important Note: The above analysis is based purely on my personal research and is intended for educational purposes only. I am not SEBI registered, and this should not be considered as investment advice. Please consult with a qualified financial advisor and do your own research before making any investment decisions. Past performance does not guarantee future results, and all investments carry inherent risks.
