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Best Mutual Funds to invest in 2018 that would benefit from Rural Theme

Best Mutual Funds to invest in 2018 that would benefit from Rural Theme-minBest Mutual Funds to invest in 2018 that would benefit from Rural Theme


Govt of India has been giving indication about it is focus on increasing Rural Spending in FY2018 budget and in coming years. We have indicated this in our article last week as part of some of the best investment options to invest in 2018. However, investing in stocks could be high risk. Mutual Funds on other hand can provide good returns along with less risk. Which are the best mutual funds to invest in 2018 that are investing on stocks which would benefit from Rural Theme? This article would provide some of the best mutual funds that invests in companies which would benefit from Govt’s focus on Rural Spending.

Also Read: Top 10 Best Mutual Funds for creating wealth in long term of 15-20 years

Why Govt of India is focusing on Rural Spending now?


If you are already aware, skip this section.

Govt of India has been giving indication for a while about increasing Rural Spending. Recently Finance Ministry indicated that Govt of India is giving extra focus on rural sector and would help prolonged rural distress. Government is expected to pay more attention on the rural economy and agriculture in its Union Budget in 2018.

How I picked up Best Mutual Funds to invest in 2018 that would benefit from Rural Theme?


1) It is little hard to filter such rural based mutual funds as only few funds would fall under this category. We have filtered these funds based on investment objective and based on their investment style in specific sectors.

2) We have filtered Mutual fund schemes that invests in stocks which are focussing on rural India.

3) We have filtered mutual fund schemes whose objective is to invest in stocks of FMCG, Crops, Seeds, Chemicals, Pesticides etc., which would get benefited with Focus on Rural theme.

4) We have further filtered these funds based on the performance in the last 1 year, 3 years and 5 years period.

5) These funds are not rated by value research Online or Crisil as these are theme specific funds.

6) Some of the funds could be repetition from our earlier recommendations.

Best Mutual Funds to invest in 2018 that would benefit from Rural Theme


#1 – Sundaram Rural India Fund


sundaram rural india fund - Best Rural Mutual Funds to invest 2018-min

The scheme aims to generate consistent long-term returns by investing predominantly in equity/ equity related instruments of companies that focus on Rural India.

Its top Portfolio consists of Hindustan Unilever, M&M, ITC, NCC, Tata Chemicals, UPL, Rallis India etc.,

Why to invest:  This fund has been performing well compared to its peers. This fund gave 20% annualized returns in the last 5 years, 20% annualized returns in the last 3 years and 36% returns in the last 1 year. If one would have invested Rs 1 Lakh 5 years back, the investment value as of now would have been approx. Rs 2.5 Lakhs. If one would have invested Rs 1 Lakh 3 years back, the investment value as of now would have been approx. Rs 1.8 Lakhs. This fund is investing in companies that are focusing on Rural areas, hence it would get benefitted from Rural Theme. This is one of the Best Mutual Funds to invest in 2018 which would benefit from Focus on Rural Theme.

#2 – Tata India Consumer Fund


Tata india consumer fund - Best Rural Mutual Funds to invest in 2018-min

The MF scheme objective is to create long term capital appreciation by investing atleast 80% of it's net assets in equity / equity related instruments of the companies in the Consumption Oriented sectors in India.

Its top Portfolio consists of Hindustan Unilever, Future Retail, M&M, United Spirits etc.,

Why to invest:  This fund is < 3 years old fund, however performed well compared to its peers. This fund gave 70% returns in the last 1 year. If one would have invested Rs 1 Lakh an year back, the investment value as of now would have been approx. Rs 1.7 Lakhs. This fund is investing in companies which are focusing on consumption sector, that would get benefitted from Rural Theme. This is one of the Top Mutual Funds to invest in 2018 which would benefit from Focus on Rural Theme.

#3 – Tata Energy and Resources Fund


Tata energy and resources fund - Best Rural Mutual Funds to invest in 2018-min

The mutual fund scheme seeks capital appreciation by investing atleast 80% of it's net assets in equity/equity related instruments of the companies in the Resources & Energy sectors in India.

Its top Portfolio consists of Reliance Industries, UPL, Tata Chemicals, ONGC etc.,

Why to invest:  This fund is < 3 years old fund, however performed well compared to its peers. This fund gave 32% returns in the last 1 year. If one would have invested Rs 1 Lakh an year back, the investment value as of now would have been approx. Rs 1.32 Lakhs. This fund is investing in companies which are focusing on resources and energy sector which would also benefit from Rural Theme. This is one of the good Mutual Funds to invest which focuses based on Rural Theme.

#4 – UTI India Lifestyles Mutual Fund


UTI india life styles fund - Best Rural Mutual Funds to invest in 2018-min

The MF scheme provides long term capital appreciation from a diversified portfolio of companies that are expected to benefit from changing Indian demographics, Indian lifestyles and rising consumption pattern.

Its top Portfolio consists of Nestle India, Hero Motocorp, Tata Global Breverages, Avenue Supermarts, ITC, United Spirits, Hindustan Unilever, Prataap Snacks etc.,

Why to invest: This fund gave 13% annualized returns in the last 5 years, 9% annualized returns in the last 3 years and 31% returns in the last 1 year. If one would have invested Rs 1 Lakh 5 years back, the investment value as of now would have been approx. Rs 1.8 Lakhs. If one would have invested Rs 1 Lakh 3 years back, the investment value as of now would have been approx. Rs 1.3 Lakhs. This fund is investing in companies in the area of FMCG, Chemicals, etc., which are focusing on Rural areas, hence it would get benefitted from Rural Theme. This is one of the good Mutual Funds to invest in 2018 that benefits from Rural Theme.

Also Read: Best Sector Based Mutual Funds that can double your money in 2-3 years

#5 – UTI Transportation and Logistics Fund


UTI transport and logistics fund - Best Rural Mutual Funds to invest in 2018-min

Its objective is to provide Capital appreciation through investments in the stocks of the companies engaged in providing transportation services, design, manufacture, distribution or sale of transportation equipment and companies in the logistics sector.

Its top Portfolio consists of Maruti, Hero Motocorp, M&M, etc.,

Why to invest: This is my favorite sector mutual fund. This fund gave 31% annualized returns in the last 5 years, 15% annualized returns in the last 3 years and 36% returns in the last 1 year. If one would have invested Rs 1 Lakh 5 years back, the investment value as of now would have been approx. Rs 3.8 Lakhs. If one would have invested Rs 1 Lakh 3 years back, the investment value as of now would have been approx. Rs 1.5 Lakhs. This fund is investing in some of the best companies in auto sector that would get benefited from Rural theme. This is one of the best Mutual Funds to invest that benefits from Rural Theme.

Summary of these Top Rural Theme Based Mutual Funds are here


Summary of Best Rural Mutual Funds to invest in 2018-min

How to invest in these Rural Based Mutual Fund Schemes?


Now you would have got doubt whether to invest through SIP or lumpsum in these funds. Investing through SIP in these funds are good. One can invest in atleast 6-12 months through SIP. If you want to invest lumpsum, you can invest in 3-4 lots over a period of 6 months time frame. These are like regular mutual fund schemes, hence you can just login to your mutual fund account and do SIP or lumpsum investments.

How long should you invest in these Rural Based Mutual Fund Schemes?


Like Infra sector, Govt of India may focus on the Rural Theme for next few years. There is no defined period to invest in these funds. However, based on the current view, one can invest in these mutual fund schemes anywhere between 2-5 years. Means these are short term mutual fund schemes and not for medium or long term. If you are thinking of investing for long term, you can skip these funds.

Also read: Good Mutual Fund Schemes that has good Crisil and Value Research Online Rating

What is the risk factor in these mutual Funds?


Like any other sector mutual fund schemes, these are high risk. These may turn to worst performers in short span of 1-2 years. One should keep an eye on the rural spending by Govt of India. If you think that such focus is reduced or lost you should come out from such funds.

All the best to invest in Rural Based Mutual Fund Schemes !!!

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Suresh

Best Mutual Funds to invest in 2018 that would benefit from Rural Theme

The Author

Suresh KP

Suresh KP i.e. me have written 1,500+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

7 Comments

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  1. I am thinking of investing in this. However when I validated the information from Value Research site, the returns are totally different. You have mentioned Tata India consumer gave 70% in a year. But in other sites it says 34%. Also it was mentioned that returns since launch is 31% only. Can you check and confirm are we good to start on these or do you suggest anything better than these funds?

    1. Hi Srinivasan, The data what I stated is as on that date. You don’t need to worry. If you can take some risk, you can go ahead and invest in such funds.

  2. Hello Suresh ,

    Can you recommend good MF for natural resource, mining, energy, utilities, tech only with the intention to keep it long term 8-10 years

    Thank You

    1. Would post an article in coming week about this.

      1. Thank You Suresh , Looking forward towards the article

  3. Tata india Consumer grown 70%in one year.
    Do you think as Contra view it should be avoided among 5 ? Returns tend to reach mean levels normally.
    Thanks.

    1. Don’t worry about past returns. We are now focussing how such funds can add value in future.

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