2024-04-16 12:47:42
Mumbai: The year 2023-24 was a great year for the mutual fund industry. This year there was a net inflow of Rs 22,633 crore. This data is from the Association of Mutual Funds in India or AMFI. This is the organization that runs the mutual fund industry in the country. Actually, if seen, the magic of compounding works in mutual funds. If you invest in it for a long time then you get better returns. The longer you keep money invested in it, the more your wealth grows. That is why investors in this fund have got 9 times returns in the last 16 years of the fund.
Which fund is this?
Today we are talking about ICICI Prudential’s Blue Chip Fund. This fund was started in May 2008. If an investor had invested Rs 1 lakh at the time of its launch, then that amount has become Rs 9.6 lakh by March this year. That means a return of more than 9 times has been received.
Where is investment in this fund
ICICI Bluechip basically invests in large cap stocks. When it comes to large cap investing, investors have a variety of large cap mutual funds to choose from. Being a large cap fund, the scheme invests in the top 100 companies by market capitalisation. The fund follows a bottom up stock picking approach. The fund does not take into account very large sectors, but within sectors, it aims to select stocks with the most promising outlook.
Investment is not made in any company just like that
Anish Tawakle, deputy CIO (fund manager of equities and schemes), ICICI Prudential AMC, says that for any company to be a part of this portfolio, a company has to fulfill three conditions. It has a track record of profitability, market leadership and reasonable combination capabilities. That is why it is less volatile than other funds. Throughout its history the fund has weathered a variety of market events, including the 2008 financial crisis, the 2013 interest rate spike, and the 2020 COVID-19 pandemic. The fund has demonstrated low volatility in each of these phases.
Annual compound return of 15.33 percent
This fund has given annual compounded returns of 15.33% since 2008. In comparison, its benchmark Nifty 100 TRI has given a CAGR return of 14.09%. The SIP returns of the fund have also been impressive. If someone had invested a total of Rs 19 lakh in 16 years through SIP of Rs 10,000, then its value would have become Rs 78.32 lakh. That means a return of 16.15%. The same investment in the benchmark has given a return of only 14.30%. In the last one year, the fund has given returns of 42.23% while its benchmark has given returns of only 34.97%. Meaning it has got 7.26% more returns than the benchmark returns. The trend of returns for three and five years has also been the same. What is the total AUM of this fund?
The total asset under management or AUM of ICICI Prudential Bluechip currently stands at Rs 51,554.28 crore. The fund’s top holdings include Financial Services (22%), Oil, Gas & Fuel (12.92%), Automobile & Auto Components (10.23%) and IT (8.99%) sectors.