ICICI Prudential Mutual Fund is the second-largest asset management company in India. With over Rs 5 Lakh crore, the AMC is among the most trusted names in the mutual fund space.
ICICI Prudential Mutual Fund offers products across asset classes.
ICICI Prudential Banking and Financial Fund
Investment Objective
The scheme’s primary objective is to generate long-term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity-related securities of companies engaged in banking and financial services.
Investment Process
- Portfolio construction: The scheme will invest a minimum of 80% of its total assets in stocks of companies engaged in the banking and financial services sector, including banking, broking, asset management, wealth management, insurance, non-banking financial companies (NBFC), and other companies that may be engaged in providing financial services.
- Benchmark agnostic: While the Scheme’s performance is benchmarked against Nifty Financial Services TRI, it may opportunistically invest in companies outside the same.
- Investment Approach: The scheme invests across market capitalizations and uses a combination of growth and blend investment style.
Portfolio Composition
As per its investment objective, the equity exposure is significant to stocks of companies engaged in the banking and financial services sector.
The funds are invested primarily in large-cap companies with approximately 81% exposure to large-cap stocks, approximately 15% to mid-cap stocks, and the remaining 4% to small-cap stocks.
Source: ICICI Pru AMC, Value Research
Top 5 Holdings for ICICI Prudential Banking and Financial Fund
| Name | Sector | Weightage % |
| HDFC Bank Ltd. | Bank | 17.41 |
| ICICI Bank Ltd. | Bank | 17.16 |
| State Bank of India Ltd. | Bank | 9.34 |
| Axis Bank Ltd. | Bank | 8.09 |
| HDFC Ltd. | Finance | 5.3 |
Source: ICICI Pru AMC
Performance Since Inception
If you had invested 10,000 at the fund’s inception, it would now be valued at Rs 95,580.
Date – 22nd August 2008.
Source: icicipruamc.com
The fund has performed consistently and has generated an annualized return of 16.4% since inception. It has outperformed its benchmark except for the five-year period.
Fund Manager
The fund is ably managed by Roshan Chutkey, who has over 12 years of experience and manages five funds.
Who Should Invest in ICICI Prudential Banking and Financial Fund?
This scheme is suitable for investors who aim to invest predominantly in companies engaged in banking and financial service and achieve goals like tactical solutions and wealth creation.
Why Invest in ICICI Prudential Banking and Financial Fund?
- The banking and financial services sector proxies India’s growing economy since every aspect of the economy is influenced by it.
- It allows investors to invest in companies engaged in the banking and financial services sector across all market caps.
Time Horizon
- One should look at investing for a minimum of five years or more.
- Investment through Systematic Investment Plan (SIP) may help tackle broader equity market volatility.
Conclusion
The scheme provides access to well-researched companies engaged in the banking and financial sectors that provide a higher return potential.
This allows investors to have exposure to one of the most critical sectors that play a crucial role in the development of any economy.
Also, the fund has consistently outperformed its benchmark except over five years. Hence, investors seeking to invest for a long-term time horizon to generate high returns with higher risk through exposure to the banking and financial sector can consider this fund.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
