101144  |  INF109K01761  |  3 star  |  Gold

NAV

$ 257.77

1-Day Total Return

0.44
%
INR | NAV as of 15/12/2017 10:30:00 | 1-Day Return as of 15 Dec 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

92.6 bil

Expenses

2.28%

Fee Level

--

Turnover

1,507%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Flexicap

Investment Style

Large Blend
Author
Morningstar's Take | 29/11/2017
by Nehal Meshram

ICICI Prudential Dynamic Growth remains a credible investment option with Sankaren Naren's distinct skill of uncovering value opportunities with a judiciously applied investment process, making a strong case for an upgrade of its Morningstar Analyst Rating to Gold from Silver. 

Over time, Naren has proved himself as an astute portfolio manager with his ability to think differently and pick stocks that have the potential to generate higher returns. Naren is backed by comanager Ihab Dalwai and a highly cohesive investment team, contributing unique investment ideas that are debated rigorously. Manish Gunwani's departure and other portfolio manager reshuffles have somewhat hampered continuity, but ICICI's focus on internal talent development and incentives promotes longevity and advance succession planning.

The fund's long-standing process is research based with a mix of top-down and bottom-up styles. The fund follows a multi-cap approach across segments, with a tilt towards value stocks that have long-term growth potential. When markets run up and valuations seem stretched, reducing net equity exposure in the portfolio is critical in this strategy. Naren deploys a rules-based approach using the historical price/book value of the market to determine fair value and in turn tweak cash allocations. He backs his conviction, even if it means underperforming over shorter time frames. He takes sector bets and aggressively trades his large-cap picks, but such tactics are not without risk. In a sustained bull run, the price/book model will point towards a higher allocation to cash, which may lead the fund to underperform its peers.

The value tilt requires significant patience, as value stocks can underperform growth stocks for lengthy periods. Nevertheless, the fund has a sound record of delivering decent long-term returns. There are inevitable periods of underperformance when the value style is out of favour, but the fund's dynamic allocation managed to provide cushion to the portfolio during the downturn. Its low expense ratio also helps. The fund remains a solid choice for investors seeking contrarian instincts and who are comfortable with the related volatility. 

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Stock selection and cash allocation have been the primary contributors to performance.

People

The fund manager made his mark leveraging contrarian bets.

Parent

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

Process

The ability to think differently is critical in this strategy.

Performance

The fund tends to generate higher returns when markets fall and lag when they rally.

Price

Inexpensive against 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

Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission.

For Recipients in India: Research on securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (“Investment Research”) is prepared by Morningstar Investment Adviser India Private Limited, which is registered with the Securities and Exchange Board of India. Your access to the Investment Research does not establish an advisory relationship with Morningstar Investment Adviser India. You should seek the advice of a financial professional before making an investment decision to ensure, among other things, that the security is suitable based on your particular needs and circumstances.

For Registered users only indicates the feature is available for Registered users only.
Top
Mutual Fund Tools
Feedback