With almost its entire portfolio in blue chips, ICICI Prudential Focused Bluechip Equity is a true large-cap fund. Most other large-cap funds shift a portion of their portfolios into mid-cap stocks, unlike this fund.
In the past one year, ICICI Pru Focused Bluechip is down 15 per cent, making it a mid-quartile performer. Given that mid-caps have been at the receiving end of the market wrath more than blue chips since January, it may seem incongruent that the fund has fared worse than peers such as SBI Bluechip or Kotak Select Focus, both of which have around 10-15 per cent of their portfolio still in mid-caps.
Much of this is attributable to the fund’s slightly contrarian stance. Its focus on valuations often sees it stay away from market favourites. It also holds a concentrated portfolio, because of which a single stock’s slide impacts returns more. But over the long term, the fund scores on all counts. Compared to its benchmark, Nifty 50, the fund is an outperformer across time frames by a margin of 3 to 4 percentage points.
ICICI Pru Focused Bluechip Equity’s steady long-term performance, its large-cap focus, lower volatility, and value-based strategy makes it a good fit for investors’ core portfolio and requires a moderate risk appetite.
Strong and steady
On a three-year rolling return basis since inception in May 2008, the fund has beaten the Nifty 50 returns nearly all the time, making it an extremely consistent performer. On risk-adjusted returns too, the fund is better than its category average.
The fund has, in the correcting markets of 2011 and the largely directionless 2013 market, done much better than both the Nifty 50 and the large-cap fund category. In the correcting market of the past year too, the fund has managed to keep pace with the category average. This shows the fund’s ability to contain downsides. In bullish markets, because of fund’s avoidance of mid-caps, its performance does not match up to the category. But this lower deviation in returns means its volatility is lower than its peers. We think lower volatility is preferable when a fund forms the core of one’s portfolio.
High conviction
While ICICI Pru Focused Bluechip has a large portfolio of 35-45 stocks, the top 10 usually make up half the portfolio; single stock weights are often 7-9 per cent. The fund keeps an eye on valuations and the long-term potential of both sectors and stocks.
Banks make up 28 per cent of the portfolio now against the 25 per cent the year before and higher than the Nifty 50’s 23 per cent bank exposure. Most stocks it holds here – ICICI Bank, Axis Bank, State Bank of India, and Bank of Baroda, which together form around 12 per cent of the portfolio – have been severely hit and are trading much cheaper than historic valuations. This partly was responsible for the fund’s relative under-performance in recent times.
The heavier weight to the banking sector compared to the index has been in place for over two years now. In mid-2014, the exposure to the sector was a good 30 per cent. Over the past year, the fund shifted out of NBFC stocks, where valuations are rocketing, into banking instead. The bad loan problems being tackled with greater intensity and a pick-up in credit growth as the economy cements its revival, can turn the fortunes of this sector around. The fund does have star private sector banks like HDFC Bank and Kotak Mahindra Bank as well.
Banks apart, the fund has a decided tilt towards sectors depending on an overall economic turnaround, such as power, oil and petroleum, industrials, and cement. It dropped exposure to automobiles, unlike several peers. The market has, so far, been kinder to the consumption theme than to cyclical themes, as growth prospects are clearer there. But it also means valuations are more expensive. While cyclical themes may not see any dramatic improvement in the near term, as the economic turnaround becomes more broad-based over time, it should then revive. Stock picking within these sectors, however, holds the key.
To this extent, the fund does appear to have leaders and those that will fare well, such as Larsen & Toubro, ACC, Reliance Industries, ONGC, Power Grid and so on, and not shaky companies. The fund has also balanced its portfolio by upping exposure to the other standard defensive pharmaceuticals and software. The fund is managed by Manish Gunwani. It has an AUM of Rs. 9,560 crore.
FundsIndia’s Research team has, to the best of its ability, taken into account various factors – both quantitative measures and qualitative assessments, in an unbiased manner, while choosing the fund(s) mentioned above. However, they carry unknown risks and uncertainties linked to broad markets, as well as analysts’ expectations about future events. They should not, therefore, be the sole basis of investment decisions. To know how to read our weekly fund reviews, please click here.
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Nice artical…Thanks fir the insights of the fund.
This fund is already part of my portfolio…
Any comparison with UTI opportunities fund…I believe both are large cap funds and performance of UTI opportunities is getting worse than the peers…Please advise if one should continue SIP in it?
Hi Gangadhar,
ICICI Pru Focused Bluechip is a good fund for any portfolio. This fund is entirely a large-cap one and is less volatile. UTI Opportunities is also a large-cap fund, but it is slightly more volatile. Its also still suffering from specific stock choices that went wrong last year, even though its got its sector allocation calls right. The stocks are, however, quite sound for the long term and can recover from here. You can continue SIPs in this fund. Equity funds also require long time frames to deliver.
Nice artical…Thanks fir the insights of the fund.
This fund is already part of my portfolio…
Any comparison with UTI opportunities fund…I believe both are large cap funds and performance of UTI opportunities is getting worse than the peers…Please advise if one should continue SIP in it?
Hi Gangadhar,
ICICI Pru Focused Bluechip is a good fund for any portfolio. This fund is entirely a large-cap one and is less volatile. UTI Opportunities is also a large-cap fund, but it is slightly more volatile. Its also still suffering from specific stock choices that went wrong last year, even though its got its sector allocation calls right. The stocks are, however, quite sound for the long term and can recover from here. You can continue SIPs in this fund. Equity funds also require long time frames to deliver.
Can NRIs with NRE accounts in India invest in this equity fund?
Yes, unless you’re from the US or Canada.
You say SBI Blue Chip has 10-15 % of their assets allocated in Mid-caps?
Whereas details provided by you in SBI Blue Chip Fund says the following:
Asset allocation
As on 26/02/2016 Net Assets (%)
Cash 6.79
Derivatives 0.86
Equity 87.04
ICRA A1+ 2.53
Rights 1.56
Warrants 1.21
which one is true? Your statement in the article or the statement provided by you in the details of SBI Blue chip Fund??
Hi Laxmi Prasad,
They’re both true…87 per cent of the portfolio – the equity portion – splits into 15 per cent of mid-caps and 72 per cent of large-caps. By the definition we use, a large-cap stock is one whose market capitalisation is above Rs 15,000 crore. Hope this clears up the confusion.
Thanks,
Bhavana
Every year i need to pay 100000 towards insurance premium both life and medical for next 10 years. i can invest lumpsum and want my interest to take care of these payments. Do you suggest me to put in fds, debt or equity funds . shall i opt for swp or dividend payout options
Hi Varsha,
Apologies for the delay in reply. It depends on how much lump sum you can put in and what your horizon is. You need certainty more than returns. Pure equity funds would not be a good idea, more so if you need to draw from the investment immediately. Equity funds are higher risk – if it is a particularly bad year, then your investment value can drop. Relying on dividend alone is also not completely safe because the quantum of dividend you get may differ from year to year. You can invest in a low-risk debt fund and do an SWP. Or you can invest in FD that gives enough interest to meet your requirements, choosing the interest payout option. But note that you will have to pay tax on the interest earned and interest rates will also change from year to year.
Thanks,
Bhavana
Thanks,
Bhavana
Thanks Bhavana. I can invets lumpsum of 10 lacs immediately. from next year onwards i need to pay 1 lac each year towards insurance premium for next 10 years. Do you suggest me to go with debt and balanced funds.
Hi Varsha,
It’s better to go put the majority of your investment in debt funds, since you need to withdraw from it regularly. A small part can go into balanced funds to provide better returns.
Thanks,
Bhavana
Thanks Bhavana,
Shall i go with 70% money in short term debt funds as the risk is low there or shall i also add dynamic bond fund in my portfolio.rest 30% planning to put in balanced funds.please advice
For specific advice regarding how much to put in each category and funds, please log in to your FundsIndia account and schedule an appointment with your advisor.
Thanks,
Bhavana
Hi,
I would like to invest in SIP of 2000 per month for 5 years.I would like to know which one will be the better to invest in,ICICI Prudential Focused Bluechip Equity fund or Franklin India Bluechip Fund?Please suggest.
Thanks,
Anindya
Hi Anindya,
Both funds are pure large-cap funds and both have solid track records of performance over the long term. Franklin India Bluechip is simply less volatile than ICICI Pru Focused Bluechip. For the amount you are investing, one fund is enough.
Thanks,
Bhavana
I want to know the diff between Mirae Asset Opp Fund vs IPru Focused Bluechip. If horizon is 15 years and mode is SIP. what is best suited and chances of capital appreciation.
I am a moderate risk investor.
Hello
Apologies for the delayed reply. Both funds are large-cap. However, IPru Focused Bluechip invests solely in large-caps and does not include mid-caps in its portfolio. Mirae Asset India Opportunities has some mid-caps and it earlier used to be a diversified/ multicap fund. IPru Bluechip’s strategy is also more value-oriented while Mirae’s leans towards growth; Ipru also tends to stick somewhat to its benchmark weights. Both are consistent and top performers in the large-cap space and both are suitable for moderate risk investors. Which fund you need to invest in depends on other funds you have in your portfolio and the amount you wish to invest. Please talk to your advisor to know this.
Thanks,
Bhavana
Hi,
I would like to invest in SIP of 2000 per month for 5 years.I would like to know which one will be the better to invest in,ICICI Prudential Focused Bluechip Equity fund or Franklin India Bluechip Fund?Please suggest.
Thanks,
Anindya
Hi Anindya,
Both funds are pure large-cap funds and both have solid track records of performance over the long term. Franklin India Bluechip is simply less volatile than ICICI Pru Focused Bluechip. For the amount you are investing, one fund is enough.
Thanks,
Bhavana
I want to know the diff between Mirae Asset Opp Fund vs IPru Focused Bluechip. If horizon is 15 years and mode is SIP. what is best suited and chances of capital appreciation.
I am a moderate risk investor.
Hello
Apologies for the delayed reply. Both funds are large-cap. However, IPru Focused Bluechip invests solely in large-caps and does not include mid-caps in its portfolio. Mirae Asset India Opportunities has some mid-caps and it earlier used to be a diversified/ multicap fund. IPru Bluechip’s strategy is also more value-oriented while Mirae’s leans towards growth; Ipru also tends to stick somewhat to its benchmark weights. Both are consistent and top performers in the large-cap space and both are suitable for moderate risk investors. Which fund you need to invest in depends on other funds you have in your portfolio and the amount you wish to invest. Please talk to your advisor to know this.
Thanks,
Bhavana
my portfolio is given below .is it right or not
1. ICICi focused blueship
2.hdfc top 200
3.hdfc balanced fund(g)
Hello,
If you’re a FundsIndia investor, please use your account to schedule an appointment with your advisor (available on your MF dashboard post log in). We need more details to review a portfolio, and we’re also constrained from providing such advice on this forum.
Thanks,
Bhavana
my portfolio is given below .is it right or not
1. ICICi focused blueship
2.hdfc top 200
3.hdfc balanced fund(g)
Hello,
If you’re a FundsIndia investor, please use your account to schedule an appointment with your advisor (available on your MF dashboard post log in). We need more details to review a portfolio, and we’re also constrained from providing such advice on this forum.
Thanks,
Bhavana
Every year i need to pay 100000 towards insurance premium both life and medical for next 10 years. i can invest lumpsum and want my interest to take care of these payments. Do you suggest me to put in fds, debt or equity funds . shall i opt for swp or dividend payout options
Hi Varsha,
Apologies for the delay in reply. It depends on how much lump sum you can put in and what your horizon is. You need certainty more than returns. Pure equity funds would not be a good idea, more so if you need to draw from the investment immediately. Equity funds are higher risk – if it is a particularly bad year, then your investment value can drop. Relying on dividend alone is also not completely safe because the quantum of dividend you get may differ from year to year. You can invest in a low-risk debt fund and do an SWP. Or you can invest in FD that gives enough interest to meet your requirements, choosing the interest payout option. But note that you will have to pay tax on the interest earned and interest rates will also change from year to year.
Thanks,
Bhavana
Thanks,
Bhavana
Thanks Bhavana. I can invets lumpsum of 10 lacs immediately. from next year onwards i need to pay 1 lac each year towards insurance premium for next 10 years. Do you suggest me to go with debt and balanced funds.
Hi Varsha,
It’s better to go put the majority of your investment in debt funds, since you need to withdraw from it regularly. A small part can go into balanced funds to provide better returns.
Thanks,
Bhavana
Thanks Bhavana,
Shall i go with 70% money in short term debt funds as the risk is low there or shall i also add dynamic bond fund in my portfolio.rest 30% planning to put in balanced funds.please advice
For specific advice regarding how much to put in each category and funds, please log in to your FundsIndia account and schedule an appointment with your advisor.
Thanks,
Bhavana
You say SBI Blue Chip has 10-15 % of their assets allocated in Mid-caps?
Whereas details provided by you in SBI Blue Chip Fund says the following:
Asset allocation
As on 26/02/2016 Net Assets (%)
Cash 6.79
Derivatives 0.86
Equity 87.04
ICRA A1+ 2.53
Rights 1.56
Warrants 1.21
which one is true? Your statement in the article or the statement provided by you in the details of SBI Blue chip Fund??
Hi Laxmi Prasad,
They’re both true…87 per cent of the portfolio – the equity portion – splits into 15 per cent of mid-caps and 72 per cent of large-caps. By the definition we use, a large-cap stock is one whose market capitalisation is above Rs 15,000 crore. Hope this clears up the confusion.
Thanks,
Bhavana
Can NRIs with NRE accounts in India invest in this equity fund?
Yes, unless you’re from the US or Canada.