100349  |  INF109K01431  |  4 star  |  Silver

NAV

$ 316.15

1-Day Total Return

-0.78
%
INR | NAV as of 18/10/2017 09:30:00 | 1-Day Return as of 18 Oct 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

26.7 bil

Expenses

2.58%

Fee Level

--

Turnover

1,097%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Large-Cap

Investment Style

Large Blend
Author
Morningstar's Take | 27/12/2016
by Nehal Meshram

Our confidence in the fund’s prospects remains strong.

This is manager Sankaran Naren’s second stint on the fund after running it from September 2006 to February 2011. He relinquished fund management duties for about a year and returned to the helm in February 2012. We think highly of Naren’s investment skills, and it helps that he plies an investment strategy he has made his own through the years.

An interesting facet of Naren’s investing style is he will stick to his convictions even if the situation is contrary to his investment decision. The strategy is centred on a top-down approach and sector bets. The portfolio has a large-cap bias with a value orientation and focuses on stocks that have significant long-term growth potential. The approach of regular profit booking and rebalancing of the portfolio has helped the fund to buy equities at low valuations and sell at high valuations. We believe in Naren’s ability in reading the macroeconomic environment. He studies factors such as fiscal policy, current account deficits, inflation, economic growth rate, and government policies to form his top-down views. His philosophy is to ensure the fund performs better than peers when markets fall, even if the strategy hurts performance in rising markets, thereby ensuring robust performance over a market cycle. We believe such funds usually tend to do well across market cycles when one holds for the long term.

Naren makes use of relative valuation parameters to invest in large-cap stocks he believes are attractively priced relative to their growth prospects. It isn’t uncommon for him to trade aggressively. While Naren runs a pure-play large-cap strategy, the typical peer can invest roughly up to 30% in small/mid-caps. As a result, the fund runs the risk of losing out on the impetus smaller-cap stocks can provide. Naren's tactics are not without risk, but we believe the fund can hold investors in good stead over a market cycle. In keeping with our high conviction in its prospects, we give the fund a Morningstar Analyst Rating of Silver.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

A concentrated portfolio with a large-cap bias.

People

Fund manager made his mark leveraging his contrarian bets.

Parent

ICICI Prudential AMC’s stewardship is in line with the industry norm.

Process

A disciplined investment process following a top-down approach to evaluate stocks.

Performance

Excellent track record across the risk and return parameters.

Price

Lower than the category median.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

No material interests are held by Morningstar or the Manager Research Analyst in the financial products that are the subject of the research reports or the product issuer. Regarding Morningstar’s conflicts of interest: 1) Manager Research Analysts’ compensation is derived from Morningstar’s overall earnings and consists of salary, bonus and in some cases restricted stock; however, Manager Research Analysts are neither allowed to participate directly or try to influence Morningstar’s investment management group’s business arrangements nor allow employees from the investment management group to participate or influence the analysis or opinion prepared by them. Further information on Morningstar’s Code of Ethics policies is available from http://corporate.morningstar.com/us/asp/subject.aspx?xmlfile=540.xml

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