Good returns, well diversified

ICICI PRUDENTIAL MULTICAP FUND

Launched in October 1994, ICICI Prudential Multicap Fund is classified under the diversified equity category of CRISIL Mutual Fund Ranking. It has been ranked in the top 30 percentile (CRISIL Fund Rank 1 or 2) in the past four consecutive quarters ended March 2017.

The fund's primary objective is to generate capital appreciation through investments in equity and equity related securities in core sectors and associated feeder industries. The fund is managed by George Heber Joseph and Atul Patel. Its quarterly average assets under management stood at ~2,155 crore for the March 2017 quarter. Steady performance The fund's returns exceeded those of its benchmark (S&P BSE 200) and the category (funds ranked under the diversified equity category in March 2017 CRISIL Mutual Fund Ranking) in most periods.

The fund has experienced several bull and bear phases since its inception. It has outperformed peers and the benchmark during the recent two market phases. The fund protected itself adeptly by limiting its downside to -13.0 per cent during the Chinese slowdown, while the category and benchmark took a hit of -16.6 per cent and -19.8 per cent, respectively.

An investment of ~1,000 in the fund on April 15, 1998 would have grown to ~28,949 (compounded annualised returns of 19.32 per cent) on April 28, 2017. A similar investment in the category and the benchmark would have grown to around ~35,645 (20.74 per cent) and ~9,737 (12.69 per cent), respectively. Similarly, ~1,000 invested per month in the fund in the past five years via systematic investment plan (SIP), totaling ~60,000, would have grown to ~99,740 by April 28, 2017 at 20.51 per cent annualised returns. In comparison, a similar amount invested in the benchmark would have returned ~85,082 at 13.99 per cent. Portfolio analysis According to the March 2017 portfolio, the fund has 57 stocks across 22 sectors. Over the past few months, the fund has increased the number of stocks in its portfolio, thereby providing better diversification.

In the past three years, the top five sectors, on average, constituted 52.6 per cent of the fund's portfolio. The top exposure was to the banking sector (averaging 19.89 per cent), followed by pharmaceuticals (10.18 per cent), software (9.25 per cent), auto (6.77 per cent) and finance (6.51 per cent).

High exposure to banking has been fruitful for the fund since banking stocks have performed particularly well in the past year. Meanwhile, the other top sectors - software and pharmaceuticals - faced a difficult year, which limited the fund's performance.

Currently, banking continuSIePsRettourtnhse topTosteacl but iItCsICI fund hBaesncdhimsparlkayed exposure has bInevenstetdrimmedMultpicraopcFluivndity for proactive fund 1-year 3-year 5-year 10-year 12,000 13,634 36,000 46,372 60,000 99,740 120,000 272,351 and allocation has been diverted to non-banking financial stocks. The fund persists with pharmaceutical (7.54 per cent of the portfolio) and software (10.15 per cent) sectors. 26.69 13,393 22.64 17.25 42,880 11.76 20.51 85,082 13.99 15.67 213,963 11.15 management. None of the stocks in its current portfolio have been consistently held for the past 36 months.