Prajna Capital - An Investment Guide

The ICICI Pru Banking & Financial Services Fund has yet to make a mark. If you look at its year-to-date or 1-year return (as on November 30, 2009), the fund underperforms its benchmark. On the other hand, it’s fairly good in a peer comparison. Benchmarked against the BSE Bankex, the majority of the fund’s investments are not components of this index. Currently the fund has 64 per cent of its assets in such stocks while the average allocation since launch is 61 per cent. That would explain the underperformance in comparison to the benchmark. It would also explain why the fund fell by a lesser amount in the December 2008 and March 2009 quarter. HDFC, IDFC, Srei Infrastructure Finance, Sundaram Finance, Max India, Aditya Birla Nuvo and Reliance Capital are some other stocks that have made an appearance. While he refused to comment on individual stocks Launched in August 2008, it seemed natural that the fund manager would hold onto cash till the crisis tided over. But surprisingly, the...