102528  |  INF109K01AN2  |  2 star  |  Silver

NAV

$ 89.14

1-Day Total Return

-1.16
%
INR | NAV as of 6/23/2017 9:30:00 AM | 1-Day Return as of 23 Jun 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

12.4 bil

Expenses

2.50%

Fee Level

--

Turnover

47%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Small/Mid-Cap

Investment Style

Mid Growth
Author
Morningstar's Take | 28/08/2016
by Himanshu Srivastava

The challenges in managing a mid-cap fund are abundant. While unpredictability in the equity markets is accentuated in this segment, factors such as constrained liquidity, limited coverage, and poor disclosures make mid-cap investing a tricky proposition. The need for a skilled manager and a solid investment process cannot be overstated. ICICI Prudential Midcap Fund makes the grade on both counts.

Mrinal Singh is a competent portfolio manager who has been in the job since May 2011. He has had extensive experience as an analyst in the small/mid-cap space. Intensive research forms the core of his investment approach. He fluidly combines top-down and bottom-up approaches to identify companies in which to invest. Though the strategy can be termed broadly as growth-at-a-reasonable-price, Singh invests a small portion of the portfolio in value stocks as well. Expectedly, Singh has executed the strategy with a reasonably good degree of success.

The strategy has some inherent risks. Given the fund dwells in mid-cap territory, liquidity risk during testing times is inherent to the strategy. On a positive note, the manager is cognizant of this and maintains a daily liquidity of 15% in the portfolio. Additionally, Singh’s quality bias and valuation consciousness can hold back the fund in market phases when speculative fare is in favour.

The fund has been going through trying times for some time now. From January 2015 to July 2016, it clocked a return of 7%, underperforming its benchmark (11%) and 91% of its India small/mid-cap Morningstar Category peers. However, its performance during the three-year period continues to be impressive, beating 70% of its category peers. Hence, recent underperformance hasn’t deterred our confidence. We draw conviction from Singh’s experience, research-driven approach, and executional capabilities. With small/mid-cap his forte and value investing his speciality, Singh is playing to his strengths here. We reaffirm the fund’s Morningstar Analyst Rating of Silver.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Mrinal Singh buys reasonably priced growth stocks and stays invested for the long haul.

People

Mrinal Singh is an experienced research analyst and competent portfolio manager.

Parent

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

Process

Mrinal Singh combines absolute and relative valuation to scout for reasonably priced growth stocks.

Performance

The fund’s performance in the recent times has been below expectations.

Price

The fund’s expense ratio is higher 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

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.

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