MF Select

Reason for recommendation 

This is our mutual fund recommendation. Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same. 

ICICI Prudential Bluechip Fund - Direct Plan (Growth)



This is an open-ended equity scheme, which invests predominantly in equity of large-cap companies. It is a pure large-cap fund and even before the SEBI’s categorisation, it had maintained a large-cap concentration. The latest factsheet of the fund shows that almost 91 per cent of the corpus is invested in large-cap stocks. This is in line with the benchmark and category, however, what differentiates the fund is its cash and debt holding, which forms the remaining. At the current juncture, when the market is volatile, this conservative approach may help the fund outperform the market. Even in the year 2011 and 2015 when the market fell, the fund managed to contain its fall. 

The fund’s current constituent in terms of stock, as well as sector, is well-diversified. In terms of sector, the fund’s major investment is in the financial sector, which forms around 27.85 per cent of the AUM. This has been followed by the energy and automobile sector, which forms ~13 per cent and ~11 per cent of the corpus, respectively.

 

In terms of stocks, the major holdings of the fund are in State Bank of India, ICICI Bank, Infosys and NTPC. The performance of these scrips is expected to improve going ahead. Policy measures in terms of the NCLT and IBC are expected to revive the financial sector. The fund makes a perfect sense for investors who want to be conservative.

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DALAL STREET INVESTMENT JOURNAL - DEMOCRATIZING WEALTH CREATION

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