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.
The AMC offers products across asset classes. Let us talk about the flagship product – ICICI Prudential Small Cap Fund.
ICICI Prudential Small Cap Fund
Investment objective:
The scheme’s primary objective is to seek to generate capital appreciation by predominantly investing in equity and equity-related securities of small-cap stocks.
Investment Process:
The Scheme will invest in 40-60 stocks which will be selected based on extensive research and screening. Some stock filters and parameters include Corporate Governance, Sector Opportunity, Leverage and RoE, Earnings potential, and Valuations, etc. Stocks selected for investment will be reviewed periodically.
Portfolio Composition:
As per its investment objective, the equity exposure is majorly in small-cap stocks at 61.97%. The funds are invested across all the sectors without any specific sector being given more importance.
The top 5 sectors hold nearly 36% of the portfolio.
Source: ICICI Pru AMC
Top 5 Holdings for ICICI Prudential Small Cap Fund
| Name | Sector | Weightage % |
| Cyient Ltd. | Technology | 3.96 |
| PVR Ltd. | Services | 3.77 |
| Rolex Rings Ltd. | Capital Goods | 3.5 |
| EPL Ltd. | Materials | 3.15 |
| CCL Products (India) Ltd. | Consumer Staples | 3.14 |
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 52,020.
Source: icicipruamc.com
The fund has given consistent returns and has outperformed the benchmark by generating a CAGR (Compounded Annual Growth Rate) of 11.36% since inception.
Fund manager
The fund is ably managed by Harish Bihani, who has 11 years of experience and manages four funds.
Who should invest in the ICICI Prudential Small Cap Fund?
Investors who wish to benefit from the higher growth potential and re-rating scope of small companies could consider taking long-term exposure in this scheme.
Why invest in ICICI Prudential Small Cap Fund?
- The scheme allows investors to participate in the price discovery of small-cap stocks, usually below their full potential.
- The scheme provides access to well-researched small-cap companies with a higher return potential and could grow to become tomorrow’s market leaders in their respective segments.
Time Horizon
- One should look at investing for a minimum of five years or more.
- Investment through a Systematic Investment Plan (SIP) may help tackle broader equity market volatility.
Conclusion
ICICI Prudential Small Cap Fund provides access to well-researched small-cap companies with a higher return potential and could grow to become tomorrow’s market leaders in their respective segments.
The fund has consistently outperformed its benchmark. Hence, investors seeking to invest for a long-term time horizon to generate high returns with higher risk can consider this fund.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
