Welcome to PersonalFN’s weekly analysis on diversified equity mutual funds! In this issue, we have analysed ICICI Pru Bluechip Fund, highlighting its performance, peer comparison, investment strategy, fundamentals, portfolio, and suitability.

ICICI Pru Bluechip Fund is a prominent Large Cap Fund with a stellar track record of delivering noteworthy returns to its investors over the long term. The fund has achieved this by strategically investing in fundamentally strong stocks within the large-cap domain.

What is the growth of Rs 10,000 invested in ICICI Pru Bluechip Fund five years ago?

Past performance is not an indicator of future returns
Data as of July 10, 2024
(Source: ACE MF, data collated by PersonalFN) 

ICICI Prudential Bluechip Fund is classified as a Large Cap Fund, with its primary focus on investing in high-conviction stocks selected from the top 100 companies listed on the NSE. Since its launch in May 2008, ICICI Prudential Bluechip Fund boasts a track record of demonstrating consistent performance and delivering robust returns over the long run. Notably, the fund has achieved an impressive 15.7% CAGR since inception, outperforming its benchmark Nifty 100 – TRI, which posted a 12.3% CAGR over the same period. As of June 30, 2024, ICICI Prudential Bluechip Fund stands as the largest scheme in the Large Cap Fund category, managing an AUM of Rs 59,364 crore.

Adhering to its large cap mandate, ICICI Prudential Bluechip Fund strategically invests in a diverse portfolio of large-sized and well-established companies, selected without any sector bias. The fund’s approach involves identifying high-growth potential stocks available at reasonable valuations. Using this strategy, the fund has showcased its ability to mitigate downside risk during uncertain and volatile market conditions while rewarding investors with above-average returns during market upswings. Although ICICI Prudential Bluechip Fund experienced a relative underperformance compared to the category average during the market downturn of 2020, it emerged as one of the top performers in the category during the subsequent recovery and bullish phase.

Over the past five years, the fund has exhibited a commendable appreciation at a CAGR of 21%, surpassing its benchmark Nifty 100 – TRI, which recorded a 18.3% CAGR. An investment of Rs 10,000 in ICICI Prudential Bluechip Fund five years ago would now be valued at Rs 25,986, outpacing a simultaneous investment in its benchmark valued at Rs 23,220.

How has ICICI Pru Bluechip Fund performed in the past?

Scheme Name	Corpus (Cr.)	1 Year	2 Year	3 Year	5 Year	7 Year	Std Dev	Sharpe
Nippon India Large Cap Fund	29,534	32.78	22.83	26.72	17.55	16.64	13.86	0.39
HDFC Top 100 Fund	35,435	28.89	19.70	23.22	15.74	14.76	13.18	0.32
ICICI Pru Bluechip Fund	59,364	29.04	18.32	22.30	17.18	15.88	12.56	0.35
Tata Large Cap Fund	2,316	25.23	15.18	20.39	15.69	14.16	13.71	0.27
Invesco India Largecap Fund	1,146	28.14	14.95	20.14	16.29	15.12	14.44	0.28
Edelweiss Large Cap Fund	975	26.77	16.80	20.02	16.83	15.83	13.05	0.29
JM Large Cap Fund	234	31.71	18.53	19.87	16.03	13.87	13.68	0.34
Baroda BNP Paribas Large Cap Fund	2,120	27.97	16.89	19.73	17.72	15.62	13.07	0.32
Mahindra Manulife Large Cap Fund	511	24.19	14.20	19.62	17.86	—	13.31	0.26
Aditya Birla SL Frontline Equity Fund	29,104	23.76	14.54	19.43	15.14	13.61	13.29	0.27
NIFTY 100 – TRI		21.44	13.05	17.87	14.86	14.42	14.01	0.23

The securities quoted are for illustration only and are not recommendatory.
Returns are on a rolling basis and in %. Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised. Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.
Data as of July 10, 2024
(Source: ACE MF, data collated by PersonalFN)
Please note, this table only represents the best-performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.

ICICI Prudential Bluechip Fund has exhibited commendable performance, consistently maintaining a reasonable lead over the benchmark across various time periods. Moreover, it has consistently surpassed the category average on numerous occasions in the past. Following a period of subdued growth between 2018 and 2020, ICICI Prudential Bluechip Fund has demonstrated visible improvement in its performance in recent years, delivering returns at a robust 22.3% CAGR over the last 3 years and 17.2% CAGR over the last 5 years. Currently positioned among the top quartile performers in the Large Cap Fund category across different time frames, ICICI Prudential Bluechip Fund has demonstrated substantial growth compared to the benchmark.

Notably, the fund has not only generated superior absolute returns but has also excelled in providing higher risk-adjusted returns. Its Standard Deviation has remained significantly lower than the category average and the benchmark. Additionally, its risk-adjusted performance, as indicated by the Sharpe ratio (0.35), stands notably ahead of the benchmark, placing it among the top performers in the category.

[Read: Large Cap Funds Have Begun to Outperform Their Benchmark. Here’s Why]

[Read: Sensex at 80,000! How to Approach Equity Mutual Funds Now]

What is the investment strategy of ICICI Pru Bluechip Fund?

ICICI Prudential Bluechip Fund is a Large Cap Fund mandated to invest predominantly in large-cap stocks and hold a minimum of 80% of its investment in equity & equity-related instruments of large-cap companies. Accordingly, the fund needs to invest in stocks from the universe of top 100 stocks (by market capitalisation), as per the list published by AMFI. ICICI Prudential Bluechip Fund follows a bottom-up approach of stock picking whereby it shortlists companies with a proven track record, quality management, and good growth potential.

It follows a process-based investment strategy to identify quality large-cap stocks in which the fund manager has high conviction. While the fund majorly has a growth-oriented approach, it has also shown some flair towards the value style of investing. The fund invests in a diversified portfolio of stocks without any sector bias. While picking stocks the fund managers look for the scalability of the company they are considering to buy and give high weightage to the management track record and scope of improving profitability. The fund typically follows a buy-and-hold strategy, looking for a long-term holding period. It had a low turnover ratio of around 20-30% in the last one year.

What are the top portfolio holdings in ICICI Pru Bluechip Fund?

Holding in (%) as of June 30, 2024
(Source: ACE MF, data collated by PersonalFN) 

As of June 30, 2024, ICICI Prudential Bluechip Fund held a well-diversified portfolio comprising 64 stocks. The top 10 stocks accounted for 51.8% of the fund’s total holdings. The fund held its major exposure in index heavyweights such as ICICI Bank, Reliance Industries, L&T, HDFC Bank, and Axis Bank. Among its other top holdings, the fund held names like Maruti Suzuki India, Infosys, Ultratech Cement, Bharti Airtel, and Sun Pharma having allocations in the range of 2.5% to 4.5%. Many of these names have been prominent holdings in the fund’s portfolio for well over 2 to 3 years now. It also currently holds a nominal allocation of 1.1% in Rights.

In the last two years, ICICI Prudential Bluechip Fund benefitted the most from its holdings in L&T, ICICI Bank, Bharti Airtel, Axis Bank, and TVS Motor Company which turned out to be the top contributors to its gains. Lupin, HDFC Bank, NTPC, Sun Pharma, and Reliance Industries, were among the other top contributors to its gains.

In terms of sector, ICICI Prudential Bluechip Fund’s portfolio is skewed towards Banking and Finance which collectively form 24.2% of its portfolio. Auto, Petroleum, Engineering, and Infotech are the other top sectoral holding collectively accounting for another 35.7% of its assets. The remaining portion of the fund’s portfolio is diversified across a range of sectors like Pharma, Cement, Consumption, Telecom, and Power, among others. While the fund’s portfolio has a higher allocation to cyclicals it also has reasonable diversification to defensive and sensitive sectors.

Is ICICI Pru Bluechip Fund suitable for my investment goals and risk tolerance?

ICICI Prudential Bluechip Fund has demonstrated a consistent ability to identify fundamentally strong stocks within the large-cap space. The fund’s strategy focuses on minimising volatility by constructing a well-diversified portfolio across sectors, emphasising stocks with a competitive edge and sustainable market share. Notably, ICICI Prudential Bluechip Fund adopts a long-term perspective, remaining resilient to short-term market events.

ICICI Prudential Bluechip Fund has established a track record of identifying fundamentally strong stocks, maintaining a well-diversified and resilient portfolio, delivering above-average returns, and exhibiting stability through market cycles. With its long-term focus, gradual portfolio adjustments, and ability to navigate volatility, ICICI Prudential Bluechip Fund can potentially outperform and steadily generate market-beating returns over complete market cycles.

ICICI Prudential Bluechip Fund is suitable for investors seeking stable returns over the long-term along with the reliability of large caps preferably having a long-term investment horizon of at least 5 years.

Want to find out which among the two popular Large Cap Funds is a better fit for your portfolio? Click the video link below:

Note: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.

This article first appeared on PersonalFN here