With almost nine years of bull market, Indian equity market is falling. As per the experts of MySIPonline, this can be the starting stage of the bear market. No matter that the indexes are rolling towards new heights, all the big stocks are in red. Every sector has gone down, and this leads to creating stress for investors. However, the best is to stay invested in the mutual funds. In the current market phase, the only stocks that are providing good returns are the large-cap stocks. In this trend, a fund that has delivered healthy alpha of 0.21%, when a category has gone negative is ICICI Prudential Bluechip Fund. As per Mr Sankaran Naren, CIO of ICICI Prudential Mutual Fund, large-caps are continued to be preferred over mid and small-cap as the bull markets are maturing. He says that the returns get concentrated as the bull market moved to the second or third stage. Thus, the financial specialists of MySIPonline have researched about the fund’s performance and portfolio, whose details have been provided below:
In-Depth Look of ICICI Prudential Bluechip Fund:
The factors that have been working for the fund is its consistent performance. Launched in the year 2008, the fund has gathered a large amount of AUM of Rs 18,747 Cr as on Jul 31, 2018, with an expense ratio of 2.12%. In the past three and five years, the fund has given the returns of 13% and 17%, whereas its benchmark, NIFTY 50 TRI has provided the returns of 10% and 14% for the same time period.
Having the average market capitalization of Rs 132,409.90 Cr, as on Aug 13, 2018, ICICI Prudential Focused Bluechip Equity Fund is investing in 59 companies. It is following the blend of growth and value investing philosophy keeping its highest investment in the finance and banking sector. This is followed by energy, automobile, technology and FMCG sector. There are many other sectors also where it is investing a small amount of its corpus.
After the re-categorization of mutual funds, it has provided exposure of its 80% assets to large-cap stocks. This has increased the difficulty of fund managers Mr Naren and Mr Chandak to manage the large corpus in the compact portfolio. However, how the fund management team will manage this and provide positive returns will be a watch.
Investment Strategies Followed for ICICI Prudential Bluechip Fund (G):
Both the fund managers are biased towards quality and pick the funds on the basis of the competitive analysis, providing a filter to stocks in various sectors. They follow the buy and hold approach to provide the good track record who have good management and potential growth in the long run. Following the bottom-up approach of selecting the stocks, it takes aggressive and high conviction stocks. These strategies of the fund management team help ICICI Prudential Bluechip Fund growth to generate competitive alpha. They are also benchmark agnostic, where they select the sectors with a deviation of +/-5 per cent.
As per the financial analysts of MySIPonline, in the mature bull phase, large-cap stocks tend to do better than generalized mid and small cap. This all will provide stability to the returns of ICICI Prudential Bluechip Fund growth, which holds the downside risk better than mid and small-cap funds.
