Fund Pick: ICICI Prudential Value Discovery Fund a consistent outperformer

Launched in August 2004, the ICICI Prudential Value Discovery Fund has featured in the top 30 percentile of the value/contra funds category of CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through December 2022.

The fund’s month-end assets under management increased to Rs 27,515 crore in December 2022, from Rs 14,912 crore in December 2019.

The scheme's investment objective is to seek long-term wealth creation by actively investing in equity/equity-related securities, following a value investment strategy.

Sankaran Naren and Dharmesh Kakkad have been managing the fund since January 2021.

Trailing returns

The fund has outperformed the benchmark (Nifty 500 Total Return Index) and its peers (funds ranked under the value/contra category in the December 2022 CMFR) in the past one-, two, three-, five-, seven-, and 10-year trailing periods.

To put this into perspective, Rs 10,000 invested in the fund on August 16, 2004, i.e., since its inception, would have increased to Rs 2.81 lakh on February 16, 2023, at an annualised rate of 19.75 per cent, compared with the category and benchmark which would have grown to Rs 1.74 lakh (16.69 per cent per annum) and Rs 1.42 lakh (15.45 per cent per annum), respectively.

A systematic investment plan is a mode of disciplined investment offered by mutual funds, through which one can invest a fixed sum at regular intervals.

A monthly investment of Rs 10,000 in the fund over the past 10 years, totalling Rs 12 lakh, would have grown to Rs 28.22 lakh (16.41 per cent annualised returns), compared with Rs 24.24 lakh (13.56 per cent annualised returns) in the benchmark as on February 16, 2022.

Portfolio analysis

In the past three years, the fund took exposure across market capitalisations, allocating predominantly to large-cap stocks (averaging 72.52 per cent). Allocations to mid-cap and small-cap stocks averaged 11.87 per cent and 4.90 per cent, respectively.

The portfolio was diversified across 16 sectors. The energy sector dominated, with an average allocation of 15.29 per cent, followed by financial services (14.65 per cent), information technology (11.84 per cent), automotive (11.54 per cent), and pharmaceutical (10.98 per cent) sectors.

During the analysis period, the fund took exposure to 142 stocks and held 13 consistently.

Sun Pharmaceutical Industries, Mahindra & Mahindra, Infosys, Bharti Airtel, and NTPC (formerly National Thermal Power Corporation) were the key contributors to its performance.