ICICI Prudential Value Discovery Fund - Rating & Review – Invest

ICICI Prudential Value Discovery Fund – Rating & Review – Invest

Roboadviso     Mutual Funds,Mutual Funds Rating     Posted On, Wed 24th August, 2016     2 comments
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  • Rated 3 stars
  • 60%

  • ICICI Prudential Value Discovery Fund
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  • Last modified: July 21, 2017

ICICI Discovery Fund

ICICI Prudential Value Discovery Fund is an equity multi-cap or flexi-cap fund investing in a diversified portfolio of value stocks. Let us know more about the fund in-depth, the portfolio, the performance and if we should buy, sell or retain it.

Basic information and costs
ICICI Prudential Value Discovery Fund was launched in August 16, 2004. The fund has undergone a name change; it was originally called ICICI Prudential Discovery Fund. Since 2014, it is known as ICICI Prudential Value Discovery Fund.

This open-ended fund is benchmarked against S&P BSE 500. The minimum investment is Rs. 1000 and the minimum SIP-based investment is Rs. 500. The expense ratio is 2.25 percent, there is an exit load of 1 percent if you redeem your investment before 365 days. The fund has a turn-over of 93 percent. The AUM (Assets Under Management) size is Rs. 13,883 crores.

From the risk perspective, the fund is categorized as ‘moderately high’. There are two fund managers, Mrinal Singh (since 2011) and Atul Patel (since 2012). Apart from this fund, Mrinal Singh manages many other funds of ICICI Prudential AMC.

Fund Allocation
On a sectoral basis, ICICI Prudential Value Discovery Fund invests 24.24 percent in finance, 10.57 percent in technology, 8.43 percent in energy, 8.26 percent in healthcare and 7.37 percent in construction. The top holdings in its portfolio are Larsen & Toubro Ltd (6.29 percent), ICICI Bank (6.11 percent), National Thermal Power Corp (5./69 percent), Infosys (4.96 percent) and Sun Pharmaceuticals (4.79 percent). All of these findings are as per July 31, 2016.

Performance
Since inception, the fund has given 23.36 percent returns. In the past ten years, the fund has given 17.59 percent as against the benchmark of 10.34 percent and category average of 13.18 percent. The 5-year return is an impressive 23.72 percent compared to the benchmark of 13.09 percent and category average of 16.35 percent. The 3-year return at 36.71 percent smashes the benchmark of 20.75 percent and the category average of 26.27 percent. The past 1 year performance has been at 3.75 percent which is tad-less than the benchmark of 3.85 percent and the category average of 4.68 percent.

Analysis
The fund managers have done a commendable job with the fund, especially if you consider the praiseworthy way in which ICICI Prudential Value Discovery Fund beat the benchmark and category average in the past 3 and 5 years. The fund has an approach of choosing stocks that has high potential but are available at discount rates in the present. The parameters used for stocking picking are P/BV (Price to Book Value), PE (Price to Earnings Ratio) and relative market capitalization. Traditionally, the fund likes to give 50 to 75 percent weightage to small and mid-caps but since October 2015, it has tilted to large caps with 60 percent weightage. One of the most influential factors for the fund to adopt a contrarian approach and emerge successful, is the fund manager Mrinal Singh, who is an experienced analyst and an ace in picking potentially winning stocks from small and mid-cap segments

Should I buy, sell or hold?
The fund has a great track record in the past but the fund has been struggling in last 1 year. Its not recommended for fresh investment. If you are already an investor, continue investing in it, because it has the potential to stay ahead of the rat-race even in the future.

Pros

Excellent Fund Manager
Excellent Fund House
Good Performance Consistency

Cons

Performance struggling since last 1 year
Large Fund Size
High Expense Ratio

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  1. This fund is not performing compared to its peers in last 1.5 years….
    Should i contd investing.

     
    • Hey Martin! Give fund one more year before you decide to exit. The fund follws value strategy and opt for stocks which may be out of favour now but are expected to do goood in future. They have recently invested in IT and Healthcare as contra play. Give the fund some time. The team is still good.

       

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