LIC MF Consumption Fund

LIC MF Consumption Fund has delivered a CAGR of approximately -0.01% over 1Y, 3Y, 5Y, 7Y, 10Y, 12Y and 15Y windows, while the NIFTY 50 benchmark posted negative CAGRs ranging from -7.82% (1Y) to -0.54% (15Y), resulting in positive alpha across most periods (6.71% at 1Y, 1.97% at 3Y). However, SIP XIRR data is not available for the fund, so a like-for-like comparison with the category average SIP XIRR of 14.1% (1Y) to 16.95% (5Y) cannot be made. Calendar year returns were modest, with 0.73% in 2026 and -0.3% in 2025.

The fund shows a maximum drawdown of just -0.15% with a recovery period of 133 days, and only 1 drawdown event exceeding 10%, indicating very low realized downside volatility in the observed period. Beta of 0.92 with a downside capture of 78.34% versus an upside capture of 88.3% suggests the fund has historically fallen less than the benchmark in down markets, though it also participates less in upswings. The positive alpha across most time horizons points to reasonable risk-adjusted outperformance relative to NIFTY 50.

The fund holds 47 stocks with a well-diversified top 10, where the largest position, Bharti Airtel, is only 3.43% of NAV. Sector allocation is spread across consumption-linked themes, led by Consumer Durables (12.1%), Retailing (9.5%), and Automobiles (8.7%), with no single sector dominating. Holdings span telecom, hotels, aviation, healthcare, and fintech, reflecting a broad consumption and services orientation.

As a sectoral/thematic consumption fund, its near-flat CAGR against a declining NIFTY 50 suggests defensive positioning, but without SIP XIRR data it is difficult to benchmark against category peers whose average SIP XIRR ranges from 14.1% to 16.95%. The consistently positive alpha over 1Y through 12Y windows indicates steady relative performance versus the broad market. The high expense ratio of 1.56% is a headwind that investors should weigh against the fund's thematic focus.

This fund suits investors with a high risk tolerance seeking targeted exposure to India's consumption theme, and it should be treated as a satellite holding rather than a core portfolio fund. Sectoral and thematic funds are inherently cyclical, so a time horizon of at least 5-7 years is advisable to ride through sector rotations. Investors should cap allocation to this fund within a diversified portfolio given the concentrated thematic mandate.

• Positive alpha versus NIFTY 50 across 1Y to 12Y windows, including 6.71% alpha over 1Y
• Favorable asymmetry with downside capture of 78.34% versus upside capture of 88.3%
• Diversified portfolio of 47 stocks with the top holding at only 3.43% of NAV

• High expense ratio of 1.56% (Direct plan) which erodes net returns
• Near-zero lump-sum CAGR of approximately -0.01% across long horizons, well below category average SIP XIRR of 14.1%-16.95%
• Thematic concentration in consumption exposes investors to sector-specific downturns