ICICI is a leading Asset Management Company (AMC) in the country focused on bridging the gap between savings and investments and creating long-term for investors through a range of simple and relevant investment solutions.
Let us talk about the consumer product – ICICI Prudential Value Discovery Fund.
About the ICICI Prudential Value Discovery Fund
Investment objective
To generate returns through a combination of dividend income and capital appreciation by investing primarily in a well-diversified portfolio of value stocks.
Investment strategy
- Diversification: The Scheme aims at maintaining a well-diversified portfolio with the flexibility to invest across sectors and market capitalizations.
- Value investing: The Scheme, through its process of discovery, seeks to identify stocks whose prices are low relative to their historic performance, earnings, book value, cash flow potential, and dividend yield.
- Special Situations: The fund manager may also capture special situations. Typically, these are large-cap stocks that the fund manager believes are beaten down due to non-fundamental reasons.
- Bottom-Up Approach: The scheme shall adopt a bottom-up approach in identifying stocks that have strong fundamentals but are trading at prices lower than their intrinsic value.
Portfolio composition
The portfolio holds the major exposure in large-cap stocks at 60% and sectoral major exposure is Banks which account for roughly 13% of the portfolio. The top five sectors hold nearly 50% of the portfolio.
Source: Morningstar, ICICI MF
Top 5 holdings of ICICI Prudential value discovery fund
| Name | Weightage % |
| Oil & Natural Gas Corporation Ltd | 8.79% |
| Sun Pharmaceutical Industries Ltd | 7.95% |
| NTPC Ltd | 6.42% |
| Bharti Airtel Ltd | 5.07% |
| ICICI Bank Ltd | 4.48% |
Source: ICICI MF
Performance
| Fund name | 3M | 6M | 1Y | 3Y | 5Y | 7Y | 10Y |
| ICICI Pru Value Discovery Dir | 2.93 | 9.01 | 11.12 | 24.97 | 13.61 | 15.55 | 17.92 |
| S&P BSE 100 TRI | -1.44 | 2.52 | 4.36 | 15.23 | 10.75 | 14.39 | 12.89 |
Source: ICICI MF
The fund has generated a CAGR (Compounded Annual Growth Rate) of 19.70% since its inception.
Fund manager at ICICI prudential discovery fund growth
- Mr. Sankaran Naren has been managing the fund since January 2021 and is associated with the AMC since October 2004. He oversees the entire investment function across the Mutual Fund and the International Advisory Business of the Company. Mr. Naren joined the AMC in 2004 as a fund manager and has worked in various capacities in the investment function culminating in his taking over as the Chief Investment Officer. He currently manages some of the flagship schemes of the ICICI Prudential Mutual Fund. Mr. Sankaran Naren has rich experience of around 30 years in almost all spectrums of the financial services industry ranging from investment banking, fund management, equity research, and stock broking operations. During his career, he has also worked with organizations such as Refco Sify Securities India Pvt. Ltd, HDFC Securities Ltd, and Yoha Securities in various capacities. He holds a B. Tech from IIT Madras and PGDM from IIM Calcutta.
- Mr. Dharmesh Kakkad is also the fund manager since January 2021. He is associated with ICICI Prudential Asset Management Company Limited since June 2010. Prior to working in the Dealing function, he was working in the Operations Department of ICICI Prudential AMC. He is a CFA Charter holder in USA, CA, and B.Com.
Who should invest in ICICI Prudential Discovery Fund?
- Investors who are willing to participate in the process of discovering stocks that are undervalued but have the potential to do well due to strong fundamentals.
- Investors who are willing to invest for a fairly long term with an aim to benefit over the full investment cycle and have over 5 years of the investment horizon.
Why invest in this Fund?
- The scheme’s investments in undervalued stocks provide a reasonable margin of safety and help to minimize downside risk in a market fall.
Horizon
- One should look at investing for a minimum of 5-7 years or even more.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The ICICI Prudential Value Discovery Fund was launched in August 2004 and in its track record of nearly nineteen years, the fund has delivered ~20% CAGR consistently.
Thus, it is best for investors who are willing to take equity exposure and are looking for long-term investment.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
