Consumption funds are thematic mutual funds that tap into India's consumption-focused sectors and stocks. According to the Value Research data list, there are a total of 37 thematic consumption funds.<\/p>\n
However, out of these, only two funds have delivered more than 10% SIP returns over the last three years, while one scheme has given returns of less than 1%. Here's what you should know about these funds.<\/p>\n
*Source: Value Research, Data as on 19 August 2026, Direct Plans<\/p>\n
HSBC Consumption Fund and Tata India Consumer Fund topped the category with over 12% SIP returns over the last three years. On the other hand, SBI Consumption Opportunities Fund did not even touch 1% returns.The returns among consumption funds vary significantly. Nilesh D Naik, Head of Mutual Funds at PhonePe, explained that \u201cThere has been a significant divergence in performance among stocks within the consumption sector\u201d.<\/p>\n
"While the Nifty Consumption Index has delivered an average absolute return of 18%, the top third of these stocks saw an average appreciation of 38%, compared to near-zero growth for the bottom third\u201d.<\/p>\n
He added that stock selection has played an important role in the relative outperformance of funds tracking this sector.<\/p>\n
A comparison of the portfolio composition of the higher- and lower-return funds also shows differences. HSBC Consumption Fund has 97.16% of its assets invested in equities, with the remaining allocation in cash.<\/p>\n
SBI Consumption Opportunities Fund has 98.2% in equity, 0.1% in debt and 1.7% in cash and cash equivalents.<\/p>\n
HSBC Fund's top five stock holdings are Eternal, Bharti Airtel, Radico Khaitan, Maruti Suzuki and Titan.<\/p>\n
SBI Fund's top five stocks are Mahindra & Mahindra, Asian Paints, Maruti Suzuki, Jubilant FoodWorks and Berger Paints.<\/p>\n
While the two funds have around 50 stocks each, and consumer discretionary remains the top sector in both, there is a major difference in their stock holdings.<\/p>\n
Naik said, \u201cThe auto sector has been a clear outperformer within the Nifty Consumption Index, while certain FMCG names have lagged over the past three years\u201d.<\/p>\n
Naik added that, \u201cPassive consumption funds track indices with allocations typically tied to the free-float market capitalisation of stocks. Conversely, active portfolio managers determine allocations based on their own assessment of individual securities\u201d.<\/p>\n
However, he said there is no clear trend indicating that one style consistently outperforms the other.<\/p>\n
Naik added that \u201cInvesting in thematic funds based on past performance can be misleading, as sectors and themes tend to be significantly more cyclical than the broader market\u201d.<\/p>\n