Ask Morningstar: Starting off with ICICI Pru BAF and Axis Bluechip

May 18, 2022

I am 29 years old. I want to start investing. I want to start small. I have never invested in stocks or mutual funds before. I picked ICICI Prudential Balanced Advantage Fund and Axis Bluechip. What do you think?

It is great that you have started investing, however small the amount. You said that you have never invested in stocks or mutual funds before. So I am assuming that you have some fixed-income investment. When you build a portfolio, you would have to look at allocating your money across the two asset classes of fixed income and equity. The actual amount would depend on your risk and return objective and investment time horizon.

Both the funds that you have named are all well managed strategies with different mandates. You will witness the true benefits of staying invested over the long term.

Axis Bluechip is a large-cap fund and has outperformed most of its peers over the long term. It makes sense to invest in large-cap companies as they provide greater stability in times of economic slowdown given their dominant market share. Shreyas Devalkar has been managing the fund since November 2016. He is an able stock picker and plies a structured and well-thought-out process of investing with a focus on quality and growth. The portfolio comprises of companies having robust business models having sustainable competitive advantages.  The fund is run as a concentrated high-conviction strategy with a focus on long-term growth and is benchmark-agnostic. The fund maintains about 30-40 stocks and the top 10 holdings constitute about 55%-60% of the portfolio, which is slightly above the peer average.

ICICI Prudential Balanced Advantage Fund is a dynamically managed fund that invests in a mix of debt and equity depending on market movements. The fund is backed by a strong team. Sankaran Naren, Rajat Chandak, Kayzad Englim, and Ihab Dalwai handle the equity portion of the fund, while Manish Banthia manages the fixed income investments. Naren takes the lead in formulating the overall strategy and we are convinced in his execution skills that has built an impressive track record for the fund. The fund is run in a countercyclical manner, trimming exposure to equity when market goes up and increasing it when markets fall. The fund also uses derivatives to hedge the downside risk of the portfolio.


Articles authored by Nehal Meshram

Registered readers can post their queries by accessing the Ask Morningstar tab. Our team will answer SELECT queries relating to mutual funds, portfolio planning and personal finance. While we provide broad guidelines, we suggest you consult a financial adviser before making investment decisions.

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