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Mutual Fund Review: Prudential ICICI Growth Plan

Type: Equity Diversified
Fund Manager: S Naren, Deven Sangoi
Inception Date: 19-Jun-1998
 
Prudential ICICI Growth Plan – cumulative was launched in Jun 1998 and has been in operation for more than eight years now, and is predominantly a large cap oriented stock. The scheme has grown at a CAGR of 29.43%, whereas the scheme's benchmark index S&P Nifty has appreciated by 17.04 % in the same period. The scheme due to its large cap focus has managed to maintain its rankings in the top quartile inspite of the recent market meltdown. The investment objective of the scheme as per its offer document is to seek to generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related securities.
 
Prudential ICICI Mutual fund has Rs 34118.87 crores of assets under management, which is a growth of around 59% over the last years. Only UTI Mutual Fund has a greater asset base at Rs 35027.49 crores.

Prudential ICICI Growth Plan has invested in 34 scrips, top 5 holdings account for 21.56% of the portfolio and top 10 scrips constitute 36.85% of the portfolio. Reliance Industries receives the highest weightage in this month's portfolio with around 5.4% of the total net assets being invested in the scrip.
 
 

The total equity allocation is 86.35% and 12.67% of the net assets are invested in cash and equivalent. The scheme seem to have unwind some positions in the equity markets in view of the increased volatility lately as the equity allocation has come down from 95.22% in Apr 06 to current levels.

Diversified, Banks and Auto & IT are some of the sector which the fund manager is bullish on as reflected by higher asset allocation in these sectors in the last one year, and even in the recent portfolio these sectors dominate with Diversified sector alone constituting 18.17% of the net assets, with Banks and IT sectors receiving 9.66% and 8.37% allocation respectively.

Infosys Technologies, ONGC, Grasim Industries and TCS are some of the other top holdings of the portfolio. And between them they account for one-fifth of the portfolio.

The scheme has done quite a bit of shopping this month and as many as seven new stocks have entered the portfolio, namely, Bank of Baroda, JP Associates, Zee Telefilms, BHEL, Aventis Pharma, Tata Steel and Tech Mahindra, whereas, the scheme exited from some of the stocks like EID Parry, Gujarat Ambuja Cements, Indian Hotels, MTNL, NTPC and Triveni Engg. & Ind. Ltd.

 

Midcap stocks form only a miniscule part of the portfolio and traditionally Midcap and small cap exposure has not gone beyond 7-10% in the last one year, which has resulted in lending stability to the portfolio.
 
The scheme has managed to outperform its peer group average in the last one year period due to its focus on large cap stocks, as Midcap stocks have taken a severe beating in the recent crash, and most scheme with sizeable Midcap exposure are yet to recover from the aftermath. The scheme's CAGR returns of around 29% since the last eight years is noteworthy as it has seen both the phases of the market and has delivered in all circumstances. Investors looking for a scheme which can lend long term stability to their portfolio may well find their answer in Prudential ICICI Growth Plan
 

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