Comments
A value-focussed investing approach and significant proportion of large-cap stocks in its portfolio (currently 70 per cent) make ICICI Pru Value Discovery a relatively safe bet in the present volatile market conditions.
At the same time, the fund’s mid-cap exposure will come handy, if the bulls take charge again. ICICI Pru Value Discovery has been a consistent benchmark beater, trumping the CNX Midcap index across time periods by 3-10 percentage points.
Its annual rolling return over the last five years has been better that of the benchmark nearly 97 per cent of the time, attesting to consistent out-performance.
Not only does the fund race ahead during bull markets, but it also contains losses much better than the benchmark, as seen during the downturns of 2011 and 2013.
Large cap stocks
ICICI Pru Value Discovery is often categorised as a mid-cap fund, but does not seem strictly so, going by its portfolio composition. Over the past many years, at least half the fund’s portfolio has been in large-cap stocks with the allocation rising sharply when the market turns choppy.
This lends the fund a fair degree of stability. But when compared with category funds such as BNP Paribas Mid Cap Fund and Canara Robeco Emerging Equities, which largely invest in mid and small-caps, ICICI Pru Value Discovery lags in raging bull markets like the one last year. But in the long run, the fund figures in the top quartile of its category.
Value investing
True to its mandate, ICICI Pru Value Discovery has been adept at spotting winners that are available cheap. Over the past three and five years, picks such as PI Industries, Natco Pharma and Bajaj Finance have turned out to be multi-baggers.
But it’s not that the fund has always got it right; for instance, it got out prematurely from Motherson Sumi which delivered strongly. On balance though, the good choices outweigh the bad ones.
The fund was prudent to pare stake significantly last year in the public sector banks which are in trouble. It also cut stake in some infra and capital goods related sectors, where growth has not yet been as per expectations.
On the other hand, the fund padded up stake in the automobile sector and large software companies.
Currently, though stake has been reduced last year, private sector banks make up the chunk in the fund’s portfolio.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.