Invesco Global Consumer Trends FoF: Will the Shift in Consumer Trends Benefit it?

Dec 08, 2020

Over the past few years, there has been a shift in the way consumers across the globe shop, travel, spend their leisure time, and keep in touch with family and friends. Digital revolution has been the key enabler for this shift in consumer preferences across sectors because of the convenience that it offers.

Companies that have embraced these changing consumer trends are today household names and continue to show great potential for growth in the future. But since most of these companies are not listed on Indian stock exchanges, investors are unable to benefit from its growth. Thus many fund houses in India are launching schemes with an investment mandate to tap the investment opportunities in the overseas market.

Notably, investing in foreign companies and geographies that have a low correlation with the domestic market can offer the benefit of diversification and mitigate the risk to the portfolio.

To capitalize on such opportunities in global companies, Invesco India Mutual Fund has launched Invesco Global Consumer Trends Fund of Fund (FoF). The fund will invest 95%-100% of its assets in units of Invesco Global Consumer Trends Fund, a Luxembourg domiciled Invesco fund, which invests 70%-100% in a global portfolio of equity securities of companies focused on discretionary consumer needs of individuals.

Being a Fund of Fund, Invesco Global Consumer Trends FoF is mandated to invest minimum 95% of its assets in the underlying fund. The performance benchmark index of the fund is MSCI World Consumer Discretionary Index - Net Dividend.

Invesco Global Consumer Trends FoF is an open-ended equity scheme that will seek to generate long-term capital appreciation from a portfolio that is invested predominantly in Invesco Global Consumer Trends Fund, an overseas equity fund. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Table 1: Details of Invesco Global Consumer Trends Fund of Fund

Type An Open ended fund of fund scheme investing in Invesco Global Consumer Trends Fund Category FoF (Overseas)
Investment Objective To provide capital appreciation by investing predominantly in units of Invesco Global Consumer Trends Fund, an overseas fund which invests in an international portfolio of companies predominantly engaged in the design, production or distribution of products and services related to the discretionary consumer needs of individuals. However, there can be no assurance that the investment objective of the Scheme will be achieved.
Min. Investment Rs1,000 and in multiples of Re 1 thereafter Face Value Rs 10/- per unit
Plans
  • Direct
  • Regular
Options
  • Growth
  • Dividend
Entry Load Not Applicable Exit Load
  • - An Exit Load of 1% is payable if Units (in excess of 10% of units allotted) are redeemed / switched-out within one year from the date of allotment;
  • - Nil if Units are redeemed / switched-out after one year from the date of allotment
Fund Manager
  • - Mr Neelesh Dhamnaskar
  • - Mr Krishna Cheemalapati (Debt)
Benchmark Index MSCI World Consumer Discretionary Index - Net Dividend
Issue Opens: December 04, 2020 Issue Closes: December 18, 2020
(Source: Scheme Information Document)


Investment strategy - Invesco Global Consumer Trends Fund of Fund

Invesco Global Consumer Trend FoF will follow a passive investment strategy and invest 95% of its assets in units of Invesco Global Consumer Trends Fund. The remaining 5% of its assets will be invested in domestic debt and money market securities / Units of debt and liquid schemes of Invesco Mutual Fund.

Invesco Global Consumer Trends Fund is one of the funds under Invesco Funds launched in October 1994. The fund predominantly invests in companies engaged in the design, production, or distribution of products and services related to the discretionary consumer needs of individuals, which can include automobile, household construction and durables, media and internet companies and other companies engaged in meeting the demands of consumers.

Table 2: Portfolio holdings of the underlying fund

(Source: Scheme Information Document)


The underlying fund, i.e. Invesco Global Consumer Trends Fund aims to achieve long-term capital growth from a global portfolio of investments in companies focused on discretionary consumer needs of individual. It seeks to identify companies with high quality earnings growth and with the potential for capital appreciation.

The fund looks to identify companies capable of capitalizing on key themes driving consumer spending, and thus provide shareholders with compelling long-term performance by applying in-depth fundamental research and paying close attention to valuations and management quality. It believes that focus on bottom-up stock selection adds value, and deep research produces unique insights.

Under normal circumstances,the fund's asset allocation pattern will be as under:

Table 3: Asset Allocation of Invesco Global Consumer Trends Fund of Fund

Instruments Indicative Allocation
(% of assets)
Risk Profile
Minimum Maximum High/Medium/Low
Shares of Invesco Global Consumer Trends Fund^ 95 100 High
Debt and money market securities/Units of debt and liquid schemes of Invesco Mutual Fund 0 5 Low to Medium
(Source: Scheme Information Document)
^Shares of Invesco Global Consumer Trends Fund should be considered similar to units of the Fund


​Who will manage Invesco Global Consumer Trends Fund of Fund?

Invesco Global Consumer Trend FoF will be managed by Mr Neelesh Dhamnaskar and Mr Krishna Cheemalapati (Debt portion).

Mr Neelesh Dhamnaskar is part of the equity investment team and Fund Manager at Invesco AMC Ltd. He has over 15 years' experience in equity research and financial services domain. In his last assignment with Enam (now a part of Axis Bank), he tracked companies across sectors and also assisted the PMS Fund Manager in his investment decisions.

Prior to this, he was working with KR Choksey, a domestic broking house, tracking companies within the automobiles, metals and sugar sector. Neelesh has also worked with Anand Rathi Securities Limited as a Commodities Research Analyst. Neelesh holds a Commerce degree and a MMS degree with specialization in Finance from Mumbai University. He is also pursuing CFA (USA) and is a Level III candidate.

Some of the other schemes that Neelesh manages are Invesco India Midcap Fund, Invesco India Infrastructure Fund, Invesco India Feeder - Invesco Pan European Equity Fund, and Invesco India Feeder - Invesco Global Equity Income Fund.

Mr Krishna Cheemalapati is part of the fixed income investment team and currently serves as lead Fund Manager at Invesco. He has over 23 years' experience in the Fixed Income market. In his last assignment, Krishna was associated with Reliance General Insurance as Chief Investment Officer for around 2 years. He has also worked with ICAP India Pvt. Ltd. for almost 8 years as a fixed income dealer. Krishna is a BE from Andhra University, PGDBA from ICFAI business school & CFA from ICFAI.

He also manages Invesco India Treasury Advantage Fund, Invesco India Money Market Fund, Invesco India Ultra Short Term Fund, Invesco India Overnight Fund, Invesco India Gold Fund, Invesco India Gold Exchange Traded Fund, among others.

Fund outlook - Invesco Global Consumer Trends Fund of Fund

Investors are increasingly looking to benefit from attractive investment opportunities available in overseas market. Overseas Fund of Fund has emerged as a preferred mode of taking exposure to such opportunities unavailable in India. Fund houses are looking to bring various overseas investment themes for investors in India.

Being a passively managed fund of fund, Invesco Global Consumer Trends FoF will closely track the performance of the underlying fund - Invesco Global Consumer Trends Fund by mirroring its portfolio, without any analysis on stocks. Accordingly, the fund's portfolio will be restricted to the stocks that are constituents of the fund and hence, its performance will rely solely on the performance of the underlying fund.

Theme-oriented funds follow concentrated investment approach towards specific sectors and are high risk investment proposition.

If you have a risk appetite and are looking to ride the transformation curve in consumer discretionary spends, you can invest in Invesco Global Consumer Trends FoF with a long term horizon of at least 5-7 years.

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Warm Regards,
Divya Grover
Research Analyst

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