Skip to main content

Mutual Fund Review: ICICI Prudential Infrastructure

 

Being a sectoral fund, ICICI Prudential Infrastructure Fund is a riskier bet than other equity diversified schemes

 

LAUNCHED in August 2005, ICICI Pru Infrastructure Fund is one of the oldest infrastructure schemes. It is the fifth largest diversified equity fund in the country with an asset under management (AUM) of over Rs 3,700 crore. Though the fund took over quite well and lived up to the expectation of investors, of late, its performance has not been up to the mark.

Performance:

The fund showed good results at the beginning. It outperformed all broader market indices like the Sensex and the Nifty in 2006. Next year, investment in metals stocks secured returns for the fund. It employed a strategy of investing in undervalued sectors and booked profits at the right time. In 2008, the conservative stand of cash and debt allocations and a tilt towards large-cap equity saved the fund from drowning in the meltdown. That year, it earned a platinum grade in the ET Quarterly MF ratings


   Come 2009, the fund slipped in rankings to silver since the conservative approach of the fund manager didn't help the fund capture the upsides of the market. Most of the movement happened in the mid-cap and small-cap funds, whereas ICICI Pru Infrastructure Fund continued to be oriented towards large-caps. The fund delivered 68% returns as against 75% and 81% gains in the Nifty and the Sensex, respectively in 2009. In 2010, it has continued its struggle to keep pace with the gains in the benchmark indices.

Portfolio:

Being a sectoral fund, ICICI Pru Infrastructure Fund is riskier than other equity diversified schemes. Since September 2009, the fund is diversified to just about 40 stocks, with top five stocks alone comprising almost 40% of the investment. Such a high concentration increases the fund's risk per stock.The fund holds prominent large-cap stocks including RIL, Bharti Airtel, Bhel, NTPC, ONGC, and ICICI Bank to name a few. The fund is continuously reducing its exposure to the financial services sector, which has outperformed in the recent past. It is also betting heavily on telecom and metal sectors, which have not shown good track record in the past six months. "We avoid sectors where valuations are elated and have run ahead of fundamentals," says the fund manager.


   Unlike other infrastructure funds, this fund has low exposure in construction and engineering sector. The fund has meager exposure to big stock like L&T also. Since a year now, real estate has not found any place in the fund, before also it had as low as 1% investment in this sector. The fund manager is bullish on oil & gas and power sectors. The fund invests 40% of its investment in these sectors.


   At all times, more than 85% of the fund is invested in equities. The fund has maintained cash holdings to 10-12%, but on rare occasions it has gone up to 42%. The portfolio turnover ratio of the fund is 108%. This is due to the conservative approach of the fund manager. The churn is restricted to sectors with high volatility like metal, power and financial services.



Our View:

The fund has done well in the past and has the potential to do well in future. However, the fund manager's decision to concentrate more on limited stocks has adversely impacted the performance of the fund. In the infrastructure space, the stock selection has not been appropriate.

 

The Indian infrastructure sector is expected to flourish further in the coming years and this should help the performance of ICICI Pru Infrastructure Fund. However, given its track record for the past couple of quarters, investors need to observe its performance in the near term before making fresh investments.

 

On the closing note, Still This is the best Infrastructure fund of the lot.

 

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now