101144  |  INF109K01761  |  3 star  |  Silver

NAV

$ 237.51

1-Day Total Return

0.04
%
INR | NAV as of 22/08/2017 09:30:00 | 1-Day Return as of 22 Aug 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

71.2 bil

Expenses

2.25%

Fee Level

--

Turnover

897%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Flexicap

Investment Style

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

The fund continues to make a strong case for investor consideration.

This is manager Sankaran Naren’s second stint 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. However, the investment strategy remained unchanged. 

The ability to think differently and pick stocks that have the potential to become a big thing tomorrow is critical in this strategy. When markets run up and valuations seem stretched, Naren reduces net equity exposure in the portfolio. He deploys a rules-based approach using the historical price/book value of the market to determine fair value and in turn tweak cash allocations. 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 buy equities at low valuations and sell at high valuations. We believe in Naren’s ability to read the macroeconomic environment. He studies factors such as fiscal policy, current account deficits, inflation, economic growth rates, 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 hat such funds tend to do well across market cycles when one holds for the long term.

Naren is willing to back 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. Also in a sustained bull-run the price/book model will point towards a higher allocation to cash, which may lead  the fund to underperform the peers. However, we believe the fund can hold investors in good stead over a market cycle. In keeping with our high conviction on its prospects, we give the fund a Morningstar Analyst Rating of Silver.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

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

People

The fund manager made his mark leveraging his 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 has a superlative track record across the risk and return parameters.

Price

Inexpensive proposition as 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