Due to active money management and attractive returns policy, ICICI is one of the names in the market which has the most respected mutual fund house. ICICI Prudential Value Discovery Fund Direct-Growth is the most popular among its category. It is an open-ended, large-cap equity-oriented scheme, which generates returns by investing in value shares through a combination of dividend income and capital appreciation.
Now you can think what is the value of shares? Value stocks are those that trade in the market at low prices regardless of the company’s performance.
ICICI Value Discovery Fund is a multi-cap fund and has consistently provided excellent returns to investors. The fund is more than 10 years old and has nearly returned with the NIFTY 500 benchmark. This fund is a good investment for the first time
Some of the critical points of this fund are:
- Compared to the benchmark, the risk involved in this fund is comparatively low.
- Its 5-year and 10-year returns are above the benchmark.
- About 90 percent of the investment is inequity and the remaining cash is to meet the liquidity needs of investors.
- Investment in all sectors is done with the most extensive financial services and IT allocation.
- 1-year and 3-year returns are below average.
- It is an equity-oriented fund where more than 80% of the investment is made in large-cap funds, indicating that the risk involved is not high.
Some of the top holdings of this fund are:
- HDFC Bank Limited
- Sun Pharmaceuticals Limited
- Larsen & Toubro Limited
- Wipro Limited
- NTPC Limited
The fund has invested in very stable firms that have done very well in the past years and are expected to do very well in the coming years.
An investor who wants to invest for 5 years or more will opt for this fund, as the risk involved here is moderate due to the enormous investment made in large-cap stocks that mostly include bluechip companies.
ICICI Prudential Value Discovery Fund- It focuses on firms with reasonable growth potential and looks good from a financial ratio and relative market capitalization standpoint. Exposure to short and midcap names has improved significantly in portfolios and export-oriented sectors such as pharmaceuticals and technology. The scheme gave returns of 22.7% and 18.7% respectively. If you compare it to the same category, Large-Cap has given 15.8% and 10.9% returns during the same period.
Conclusion: If investing in equity funds, make sure that your investment horizon is over 7 years, as it is anticipated that mutual funds, especially equity mutual funds, will get better long-term returns. It ultimately depends on your investment horizon, on your financial plan and how much time to allocate to which fund.
The fund is currently one of the best in the diversified category. So invest for 3 to 5 years, this will help you earn returns. Equity funds should always be viewed from a long-term perspective.