ICICI Prudential Focused Equity Fund: Concentrated path to wealth creation

Launched in May 2009, the ICICI Prudential Focused Equity Fund has consistently ranked in the top 30 percentile of the focused funds category of the CRISIL Mutual Fund Ranking (CMFR) for four consecutive quarters through June 2024. As of June 2024, the fund’s assets under management stood at Rs 9,113 crore, an increase from Rs 1,675 crore in June 2021.

Vaibhav Dusad has managed the fund since August 2022. The scheme’s primary investment objective is to generate long-term capital appreciation through a concentrated portfolio invested in equity and equity-related instruments of up to 30 companies across various market capitalisations.

Trailing returns

The fund has outperformed its benchmark (S&P BSE 500 Total Return Index) over the past six months and in the one-, two-, three-, five-, seven-, and 10-year trailing periods. It has also surpassed its peers (funds ranked under the focused fund category in the June 2024 CMFR) across the same time frames.

An investment of Rs 10,000 made in the fund on its inception date, May 28, 2009, would have grown to Rs 89,560 as of October 10, 2024, achieving an annualised rate of 15.3 per cent. In comparison, the same investment in the category would have grown to Rs 92,518 (15.6 per cent annualised return), while the benchmark would have yielded Rs 84,921 (14.9 per cent).

A systematic investment plan is a disciplined investment method offered by mutual funds that allows investors to contribute a fixed amount at regular intervals. A monthly investment of Rs 10,000 over the past 10 years, totalling Rs 12 lakh, would have grown to Rs 33.03 lakh (19.4 per cent annualised returns), compared to Rs 30.57 lakh (17.96 per cent annualised returns) in the benchmark as of October 10, 2024.

Portfolio analysis

Over the past three years, the fund has maintained a focused portfolio, averaging 30 stocks in its monthly holdings. It has dynamically managed allocations across market capitalisations while predominantly favouring largecap stocks. Its average exposure to largecap stocks during this period was 76.8 per cent, with midcap and smallcap allocations averaging 15.09 per cent and 3.41 per cent, respectively.

Additionally, the top five sectors with the largest investments were financial services, with an average allocation of 31.01 per cent, followed by automotive (auto) and auto components (9.48 per cent), healthcare (9.3 per cent), information technology (9.12 per cent), and oil, gas and consumable fuels (5.87 per cent).

The fund was exposed to 71 stocks during the three-year period, consistently holding seven stocks. ICICI Bank, Sun Pharmaceutical Industries, Bharti Airtel, Larsen & Toubro, and TVS Motor Company were among the consistently held stocks and also major contributors to the fund’s performance.