ICICI Prudential Bluechip Fund gave a compounded annual growth rate (CAGR) of 13.98 per cent in 15 years, says ICICI Prudential Mutual Fund as it celebrates the fund’s 15th anniversary.
This actively-managed large-cap fund boasts assets worth Rs 37,016 crore, as on May 31, 2023, making it one of the largest schemes of its kind.
Returns
Launched on May 23, 2008, the fund saw a compounded annual growth rate (CAGR) of 13.98 per cent. For example, if an investor had invested Rs. 10 lakh in the New Fund Offering (NFO), the investment would have grown to a whopping Rs. 71.5 lakh. In comparison, investing the same amount in the scheme’s Nifty 100 TRI benchmark would have yielded only Rs. 46.8 lakh.
Surprisingly, this bluechip fund has surpassed the benchmark across all timeframes—1 year, three years, five years, 10 years, and 15 years, the fund house said in a release.
The fund’s systematic investment plan (SIPs) has also given a stellar performance, providing investors with a CAGR of 14 per cent since the scheme's inception. For example, an SIP of Rs. 10,000 per month for 15 years, or a total of Rs. 18 lakh, would have grown to Rs. 56.4 lakh.
Investment Philosophy
Commenting on the fund’s success, fund manager Anish Tawakley stresses that the scheme buys stocks of large-cap companies with a proven track record and strong management and growth potential. Tawakley emphasises the secret lies on the stocks’ buy-and-hold strategy.
Compared to the benchmark, the portfolio is currently overweight in auto, capital goods, and telecom. By building a portfolio that holds stocks and sectors with very different weightages from its benchmark, the scheme has demonstrated that with active management, one can aim to defy the odds and endeavour to deliver alpha in the large-cap category, the release said.
Comparison Within Its Category
Large-caps are less volatile compared to small and mid caps. Retail investors often include large-cap stocks in their investment portfolio due to this reason.
Data from the Association of Mutual Funds in India (AMFI) show that the large-cap direct funds returned 14.76 per cent in a year, as on June 6, 2023, slightly higher than the one-year CAGR of ICICI Prudential Bluechip Fund at 13.44 per cent.
Similarly, the large cap direct funds returned 12.56 per cent for a five-year period, more than the 5-year return of 12.12 per cent by the ICICI Prudential Bluechip Fund.
Despite market turbulences, including global financial crises, trade wars, geopolitical tensions, and interest rate cycles, the ICICI Prudential Bluechip Fund has navigated successfully.
However, the fund’s past performance does not guarantee future success. This equity-focused scheme is classified as “very high risk”, and investors must carefully evaluate their financial goals and risk tolerance before investing.
