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ICICI Prudential Dynamic Plan

 

ICICI Prudential Dynamic Plan has been ranked in the top 10 percentile, that is, the CRISIL Fund Rank 1 of the peer group in the diversified equity category for the quarter ended March 2014 under CRISIL Mutual Fund Ranking. The fund has been ranked CRISIL Fund Rank 1 for the past three quarters. The fund's average assets under management (AUM) were at ₹ 3,670 crore for the March 2014 quarter. The fund was launched in November 2002 and is co- managed by Sankaren Naren and Mittul Kalawadia.

 

Investment Style

The fund invests primarily in equities but may adopt a defensive attitude by investing in a mix of equity and/ or fixed income securities including money market instruments. Allocation would be mainly based on the macroeconomic environment, corporate earnings and market conditions.

The fund can have a dynamic asset allocation ranging from 0 to 100 per cent invested in equity market/ equity- related instruments.

The rest would be invested in debt- related instruments. On account of dynamic management, since inception, the fund has been able to outperform its benchmark ( CNX Nifty) 59 per cent of the times during a downtrend ( benchmark giving negative returns quarter- on- quarter) and 64 per cent of the times during an uptrend ( benchmark giving positive returns quarter- on quarter).

This indicates that the fund's strategy has helped in outperforming the benchmark on most occasions across market phases.

The fund has outperformed both the benchmark and the category ( represented by CRISIL- AMFI Diversified Equity Fund Index) across multiple timeframes — one, three, five, seven and 10 years. Over the longer time frame of 10 years, the fund gave an annualised return of 22 per cent visàvis 14 per cent and 18 per cent by the benchmark and category, respectively.

A monthly systematic investment plan of ₹ 1,000 for 10 years would have grown to ₹ 3.01 lakh as on April 30 ( principal invested of ₹ 1.20 lakh) resulting in annualised returns of 17.5 per cent. A similar investment in the benchmark would have grown to ₹ 2.13 lakh yielding 11 per cent annualised gains.

Risk Adjusted Returns

The scheme has given higher annualised mean return ( 14.46 per cent) with lower volatility (16.60 per cent) as compared to the benchmark and category. The benchmark had a mean return of 7.95 per cent and volatility of 21.09 per cent, while category's mean return and volatility was 9.48 per cent and 18.02 per cent, respectively, over the past three years as on April 30.

 

Portfolio Analysis

 

The fund has maintained an average 85 per cent exposure to equity over the past three years ended March, with an average equity derivative exposure of five per cent. Within equities, the fund has mostly invested in large- cap stocks. Over the past three years, 74 per cent of its equity exposure was to CRISIL defined largecap stocks.

The fund is diversified than the category. Over the past three years ended March, the fund held 69 stocks on an average in the portfolio versus the category's 45. The average exposure to top 10 holdings was 48 per cent during the same period, in line with the category's 47 per cent.

At the sectoral level, overweight exposure to software and pharmaceuticals compared with the benchmark has helped the scheme; CNX IT Index and CNX Pharma gave 9.09 per cent and 18.98 per cent compared to 4.74 per cent for the CNX Nifty Index over a three- year period ended March 31. Lower exposure to underperforming sectors such as construction, industrial capital goods and industrial products also helped the fund outperform the benchmark; CNX Realty and S& P BSE Capital Goods delivered - 16.31 per cent and - 3.03 per cent, respectively, during the same period

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