ICICI Prudential Discovery Fund is an open ended Small & Mid cap fund which aims to provide long term capital growth by investing primarily in a well-diversified portfolio. This fund is ranked-2 on Crisil’s ranking radar. The consistency of its performance makes it one of the choices for the core portfolio of the investor, reckons Arnav Pandya.
Nature: Equity oriented open ended
Inception: August 2004
Assets under Management: Rs 1,778 crore at the end of March 2012
This is a fund that is managed on the value investing principles. At the end of March 2010 banks were the top sector in this fund followed by Pharma and oil. The fund had the highest individual stock exposure to Bharti Airtel at over 6 per cent of the portfolio. This was followed by ONGC, Cadila Healthcare, Tata Tea and Great Eastern Shipping. The fund had a portfolio turnover ratio of around 1.5 times and it was outperforming the benchmark the S&P CNX Nifty over the one, three and five year time period.
Six months later banks were still the top sector holding but this was followed by Pharma ,auto ancillaries and cement. In terms of the individual stock holdings Bharti Airtel remained the top holding but there were a lot of other interesting names in the top ten holdings which included Standard Chartered Bank, Rain Commodities, Amara Raja Batteries etc. The fund was an outperformer over all the time periods since its inception.
At the end of March 2011 banks were the top sector followed by Pharma and cement. The top spot in the portfolio was now with Sterlite Industries followed by Bharti Airtel and ONGC. More than 7 per cent of the portfolio was in cash and cash equivalents and this was a significant amount but when it came to the outperformance there was no impact on the situation as this was outperforming the benchmark for the one, three and five year time periods. The portfolio turnover ratio had dropped considerably and remained low at around 0.6 times.
Six months later at the end of September 2011 banks remained as the top sector for the fund with 11 per cent share of the portfolio. Two other sectors which had a 10 per cent plus exposure were pharma and software. What was also interesting was the portfolio composition in terms of the individual stocks as Reliance industries was now the top holding with an exposure of over 6 per cent. Other stocks in the top ten list included Great Eastern Shipping, CESC, Cipla and Amara Raja Batteries. The fund continued with its consistent outperformance over all time periods though the benchmark was now the CNX Midcap Index.
At the end of April 2012 the situation was different as pharma was the top sector followed by software and auto ancillaries. In terms of the individual holdings Cipla was now the top holding ahead of Reliance Industries and Sterlite. The portfolio turnover ratio remained steady at around 0.7 times but what was significant was that 9 per cent of the portfolio was in cash and cash equivalents. This led to the outperformance of the fund continuing for all time periods.
This fund is meant for investors who want to have an exposure across different market caps and are willing to follow the value investment strategy. The consistency of its performance makes it one of the choices for the core portfolio of the investor.