5 Reasons to Include Sundaram Rural and Consumption Fund in Your Portfolio

Sundaram Rural and Consumption Fund is one the best SIP plan in India that should be included in your portfolio. The article shares 5 reasons about the same. Read the article to know more.

Sundaram Mutual Fund, the fund house is known to provide many exciting market opportunities to the investors. The launch of Sundaram Rural and Consumption Fund in 2006 again reflects the same mindset of the AMC. The thematic-consumption fund of Sundaram AMC aims to provide capital appreciation to the investors by diversifying the assets in the companies which are keenly associated with the rural India for meeting their demands. The rural sector plays a vital role in the economy of India which is one of the reasons due to which an investor should start the SIP plan in this theme-based fund. To know the other reasons, give a read to the write-up.

5 Reasons to Start Mutual Fund Investment in Sundaram Rural and Consumption Fund

1. Population Explosion:

The current population of India is around 136 Crore which makes it one of the best consumption market. High population, obviously require high supply rate to meet the demands. Moreover, by 2030 India is expected to become the third largest consumption market which makes Sundaram Rural and Consumption Fund as the best SIP investment in India. Thus, an investor who wants to see his money grow in the long term by using the ever-growing bullish nature of the consumption theme should park his surplus cash in this mutual fund.

2. Effect of Rural India on Economy:

As said above, rural India contributes immensely in the Indian economy with Agriculture Sector holding the highest percentage. The sector contributes 18% in the GDP. Also, the rural and semi-urban FMCG sector is expected to cross the benchmark of US $100 billion by 2025. Furthermore, the FMCG sector of the rural India accounts 40% of India’s FMCG sector. The key point to note here is that Sundaram Rural and Consumption Fund allocates 35.97% of the total assets in the FMCG sector and thus, it will be a good move to invest your money in this thematic fund.

3. Supporting Government Initiatives:

Several government initiatives has further aid in the upbringing of the rural sector which will indirectly assist in the development of Indian Economy. To uplift the rural banking sector, NABARD (National Bank for Agriculture and Rural Development) has decided to install 2 Lakh P-o-S (Point-on-Sale) machines in 1 Lakh villages. Also, the bank plans to provide 34 million RuPay cards to the farmers for cashless transactions. Also, the finance sector holds second highest asset allocation (15.69%) in the portfolio of Sundaram Rural and Consumption Fund which will help you to grab the market opportunities pertaining in the rural finance sector.

4. Technological Advancement:

The advancement of technology has abridged the gap between the rural and urban India. The rural area is now fully equipped with technologies after the electrification process. This advancement will further help the rural sector in producing more outputs. According to the experts, the introduction of technology in the rural areas will prove to be a milestone in Indian Economy.

5. Future Aspect:

The ruling party holds great promises for the development of the sector. Some of the initiatives that will be soon taken by the ruling party have been displayed below-
5.1 Provide agricultural loan of up to Rs. 1 lakh with
0% interest rate.
5.2 Pradhan Mantri Krishi Sinchayi Yojana will work
towards the completion of all irrigation projects.
5.3 Double the farmers income by 2022.
Increment in the cropped area under irrigation.

The above-mentioned promises if kept, will sure to boom the sector.

These were the top 5 reasons due to which an investor should start the mutual fund investment in Sundaram Rural and Consumption Fund now. Moreover, below are some key attributes of the scheme that will further compel you in choosing this thematic fund.

Other Thriving Features of Sundaram Rural and Consumption Fund

1. Excellent Past Performance: The fund has been a consistent performer from the past year with annualized returns ranging between 15% to 17% in the long run. Sundaram Rural and Consumption Fund is one of the best thematic funds in India in terms of growth and performance.
2. Low Expense Ratio: The expense ratio of sectoral fund of Sundaram Mutual Fund is 2.17% (as on 30th April, 2019) which is lowest among all the funds in the same category. Thus, a low expense ratio will further assist the investor in accumulating high capital gains in the long term.
3. Experienced Fund Managers: The fund is currently manages by Mr. S Krishna Kumar and Mr. S Bharath. The ‘duo’ is a team of well-experienced fund managers having a vast experience of the mutual fund industry. The fund managers leaves no stone unturned in grabbing the market opportunity using the best investment strategies.

By reading the above features, you must have learned that Sundaram Rural and Consumption Fund is the best SIP plan in the thematic fund category.