Skip to main content

ICICI Prudential Banking & Financial Services Fund

Invest Mutual Funds Online

Download Mutual Fund Application Forms

The banking and financial services sector has played a significant role in the development of trade, commerce and industry. This in turn has led to sector being very integral to the process of economic reforms and growth. Thus, when the country is clocking a blistering pace of economic growth rate, investing in banking and financial Services sector looks an attractive investment proposition.

It is noteworthy that India's banking and financial services sector stands on strong foundations of very prudent policy framework laid by the regulator(s). Moreover, with our economy being a developing one, the avid appetite for consumer and corporate credit, often works in favour of this sector. Also, favourable demographics and several unbanked regions makes the sector promising to invest. Likewise, other allied industries such as insurance, asset management and stock broking which are integral, also broaden the scope of investment in the theme.

ICICI Prudential Banking & Financial Services Fund (IPBFSF) is one such open-ended thematic fund, from the stable of ICICI Prudential Mutual Fund that focuses on investing in opportunities available in the banking and financial services sector. It is mandated to invest 70%-100% of its asset in equity and equity related securities of companies engaged in banking and financial services, and the rest (i.e. upto 30%) in debt market instruments. Launched in August 2008, IPBFSF has been in existence for a little over 3 ½ years now.

Fund Profile & Investment Decision Snapshot

 

Type of scheme

Open-ended

Category

Sector/Thematic

Sub-category

Banking & Financial Services

Style

Blend

Launch date

22-Aug-08

Risk-Return proposition

High Risk-Moderate Return

 

Investment Objective and Proposition

The fund's primary investment objective is "to generate long-term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity related securities of companies engaged in banking and financial services."

 

Portfolio Characteristics

In the last one year, exposure of IPBFSF to large caps has ranged between 57.0%-72.0% of its assets while the exposure to midcaps was in the range of 21.0%-31.0%. The fund has occasionally taken aggressive cash calls in the past 1 year as its exposure to debt and cash has remained in the range of 3.0%-16.0%.

Being a sector fund, IPBFSF follows top-down approach while buying stocks for its portfolio whereby it invests only in Banking and Financial Services Sector. Under normal circumstances, the fund invests about 70%-100% of its assets in equity and equity related instruments belonging to Banking and Financial services sector; including derivatives to the extent of 75% of the net assets. For defensive positioning of the portfolio, the fund manager has the flexibility to invest in debt, cash and cash equivalent assets to the extent of 30%. Also, the fund has freedom to invest across market capitalisations and is benchmarked against BSE BANKEX.

 

Equity Portfolio

Holdings

Nov 2011

Dec 2011

Jan 2012

Feb 2012

Mar 2012

HDFC Bank Ltd.

10.6

10.8

10.8

15.3

22.2

ICICI Bank Ltd.

19.8

21.9

21.9

19.3

17.8

IndusInd Bank Ltd.

-

6.6

6.6

7.9

8.0

Bank Of Baroda

6.4

5.8

5.8

6.0

5.9

Sundaram Finance Ltd.

2.5

4.0

4.0

5.2

5.4

Axis Bank Ltd.

9.3

5.0

5.0

5.3

5.1

State Bank Of India

6.6

6.0

6.0

4.8

4.4

ING Vysya Bank Ltd.

2.4

3.8

3.8

3.7

3.7

Mahindra & Mahindra Financial Services Ltd.

2.0

2.5

2.5

4.2

3.6

IPBFSFC Ltd.

-

-

-

3.6

3.6

 

As per the portfolio disclosed on March 31, 2012, the fund holds in all 18 stocks. Top-10 stocks constitute 79.7% of the portfolio, while its top-5 sector concentration has been 97.2% of its total portfolio. As on March 31, 2012, the large caps constitute 71.5% of the portfolio, while its exposure to mid and small caps was at 25.6%, while cash and cash equivalents assets to the tune of 2.8%. The fund manager of IPBFSF has not churned the portfolio aggressively as revealed by its portfolio turnover ratio of 0.68 times - which is considered low to moderate.

 

How IPBFSF has fared vis-à-vis its peers

Scheme Name

6-Mth (%)

1-Yr (%)

3-Yr (%)

5-Yr (%)

Std. Dev. (%)

Sharpe Ratio

Reliance Banking (G)

6.3

-11.5

30.5

20.9

9.66

0.26

Sahara Banking & Financial Services (G)

5.4

-10.4

29.9

-

9.88

0.25

Religare Banking (G)

5.0

-8.4

28.6

-

8.46

0.25

ICICI Pru Banking & Fin Serv (G)

8.4

-7.8

28.1

-

8.79

0.24

UTI Banking Sector (D)

7.7

-9.6

28.0

15.1

9.25

0.24

Sundaram Fin Serv Oppor (G)

6.6

-11.7

26.3

-

9.88

0.22

BSE BANKEX

8.1

-8.0

30.0

12.2

10.41

0.24

 

The table above reveals that IPBFSF's performance has been ordinary. Over a 3-Yr time frame, the fund has generated returns at 28.1% CAGR, thereby underperforming its benchmark index – BSE BANKEX with a noticeable margin. On the volatility front, the fund has exposed its investors to low risk (as revealed by the Standard Deviation of 8.79%) thereby being less volatile than some of its peers in the category as well as its benchmark. On the risk-adjusted return parameter too (as gauged by the Sharpe ratio), returns appear mediocre in comparison with its peers.

 

Performance across Market Cycles

 

BEAR PHASE

BULL PHASE

CORRECTIVE PHASE

22-Aug-2008
-
09-Mar-2009

09-Mar-2009
-
05-Nov-2010

05-Nov-2010
-
19-Apr-2012

ICICI Pru Banking & Fin Serv (G)

-40.2%

117.5%

-13.2%

BSE BANKEX

-45.4%

135.5%

-13.6%

Study of performance across market cycles reveals that IPBFSF has performed reasonably well during the bear and corrective market phases. However, it has failed to outpace its benchmark in the bull market phase.

 

Fund Manager Profile

Name of the Fund Manager

Mr. Venkatesh Sanjeevi

Total Work Experience

Over 4 years

Managing the fund since

Feb-12

Qualifications

B.com, ACA, PGDM

 

As seen above LICMF Opportunities Fund`s performance is nothing to vie for. Moreover, the fund has been unable to provide appealing returns to its investors for the level of risk taken. Also the fund's large cap bias has resulted in the fund's inability to take the absolute advantage of the mid rallies of the past.
 

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

-------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...

Stock Review: Havells

HAVELLS India's stock performance has been muted in the past three months, in line with the weak broader market. But, given the turnaround in its overseas subsidiary and the launch of new products in its consumer durable business, the company's stock may undergo a re-rating.    Havells is India's leading consumer electrical goods company, with consolidated sales of . 5,527 crore in the past four quarters. Its wholly-owned subsidiary Sylvania, which makes lighting and fixtures, has established brands in European, Latin American and Asian markets. Sylvania repre sented nearly half of the company's consolidated revenues in the first half of FY11.    Sylvania's poor financials hit Havells' consolidated performance in FY10. But, this has changed in the cur rent fiscal. Havells has reduced fixed costs of Sylvania by exiting from unprofitable businesses and outsourcing manufacturing to low-cost locations such as India and China. In the September 2010 quarter, Sylv...

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
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