According to Axis Mutual Fund, the best bet for investors in India is to invest in stocks that are directly related to consumer spending. The view of Axis Mutual Fund in Mumbai is that these are the stocks where it is possible to make money even if these shares are not cheap. Investment in consumer spending stocks has always been witnessed as one of the safest forms of stock markets investments since these stocks do not crash on a massive level.
Axis Mutual Fund currently holds over 26% of its investments in stocks that are directly related to consumer spending of some kind. Consumer goods companies represent the second largest holding for Axis right next to financials. The fund has posted average annual returns of over 24% over the last five years.
Jinesh Gopani, who heads the equities department at Axis Asset Management Co., stated that it is important to invest in stocks that are related to consumer spending of some kind. He also noted that some retail-banks and non-banking financial corporations are also part of Axis Mutual Fund’s consumer sector.
In the recent years, consumer goods companies have performed well in the market compared to other stocks. Indian units of multinational companies such as Unilever have reported gains even when their parent companies struggled in the international markets. Axis Mutual Fund has invested in many consumer goods companies with the view of reporting gains in the long term.
Gopani noted that long-term focus is important when determining the valuation of stocks in the market. Many credit rating agencies and analysts have predicted that India is all set to witness growth over 7% to 7.5% over the next 10 years. This means that consumer goods companies are expected to report solid growth as Indian consumers are expected to spend a lot in these companies with the growth in the economy.
The long-term equity fund of Axis Mutual Fund currently has holdings in various major companies including Avenue Supermarts, Pidilite Industries, Maruti Suzuki, etc.
The contents of this post/blog do not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.